3D Pioneer Systems Inc (OTCBB:DPSM) Dragged Down Again

When we first wrote about 3D Pioneer Systems Inc (OTCBB:DPSM), the stock had just made an impressive jump and it was hovering around the $0.50 per share mark. Right now, it’s pretty close to the same levels. That said, it hasn’t been sitting still for the last two months.

A promotional campaign for DPSM started a couple of days after our first coverage went online. The $475 thousand pump involved both the newsletters and a landing page set up by an entity called Future Money Trends who talked at some considerable length about the incredible potential that the company has.

They even put a long-term price target of $10 per share and the resulting excitement did manage to propel DPSM towards the higher end of the charts. At one point, it even broke through the $0.70 barrier, but unfortunately, it then faltered and plummeted back down to its pre-pump levels.

The people who managed to time their entry and exit points well most likely walked away with some healthy profits. Unfortunately, there were probably others who got a bit carried away with the excitement and, as a result, were left hoping for a second run.

It looked like their prayers will be answered when the pumpers decided to renew their efforts. This time, there were no emails involved and, surprisingly or not, the landing page was brought down. There is, however, a hard mailer brochure flying around. Unfortunately, it’s effects on the stock performance are diminishing quickly.

We first heard reports about the hard-mailer campaign last week and initially it seemed like DPSM had the legs to make another run in the right direction. The volumes picked up and on Friday, it managed to jump above the $0.60 barrier. Unfortunately, this week started on the wrong foot and on Monday, DPSM slipped and fell by around 7%. A few hours before yesterday’s session a not-particularly-positive Seeking Alpha article appeared and it resulted in another 13% drop.

Clearly, DPSM isn’t performing well under the promotional pressure, but what’s the reason for this?

The press releases sound positive enough, but unfortunately, the same can’t be said about the financial statements. As we mentioned in our previous articles, on January 31, the company had just $17 thousand in assets. DPSM did close a $500 thousand financing agreement at the end of March, but, considering the potential players in what will surely be an extremely competitive business, we’re not sure if this will be enough.

Then you have the huge amount of discounted stock held by some unnamed investors. As we mentioned numerous times already, last year, DPSM sold 44 million shares of common stock at a rate of $0.000625 a piece. We won’t be the first to tell you that if these shares hit the open market, the resulting drop could be quite painful.

The company’s dismal financial situation and the alarmingly low prices at which stock has been issued in the past could have played their roles in DPSM‘s less than impressive performance. It should be noted, however, that there might be one more thing preventing the ticker from making a run in the right direction.

The SEC has been on the hunt for promoted stocks lately. More than a few pumps ended with temporary suspension orders which, in turn, led to some huge losses for the regular traders. The people who put too much faith in Pingify International Inc (OTCMKTS:PGFY) know exactly what we’re talking about.

Could DPSM be the next suspended penny stock? Nobody knows for sure, but we wouldn’t like to bet against it.