A Literal Gambling Penny Stock, Compliance Systems, Corp. (OTC:COPI) Comes to Life

If dizziness does not affect you, you may dare to look at the graph of Compliance Systems, Corp. (OTC:COPI), a small cap company worth $6 million on the market. The ticker burst onto the screens with a promotion, which lifted it from zero daily activity. The company has been trading sporadically for the past two years, with last week marking record volumes. The reason for this is a paid promotion by The Stock Brainiac.

COPI is doing business as Irish gambling company Seanie Mac, itself listed as a development stage company. Its main operation is the gambling site SeanieMac.com. Although the house always wins, the financial statements show still limited reserves for COPI:

• $130 cash

• $1.47 million current liabilities

• Zero revenues

• $199, 140 net gain on special one-time items

Seanie Mac or COPI tries to get a chunk of the $1.7 billion spent on online gambling yearly, and cash on the country’s active horse races and sports events. A special offer may be the Gaelic Games, a series of sports specific to Ireland that according to a COPI statement are gaining world-wide appeal.

But the promising and generally successful gambling business model seems to hold no appeal for the COPI ticker. The last email came last week, and since then there have been sharp corrections, sending the stock 50% down from the initial levels. However, COPI seems to be staging a recovery with a three-day buying streak, opening on Thursday on a positive note. But given its shaky financial foundations, it is still early to say if the stock will hold in 2013 or it will return to short bursts of activity and periods of no liquidity. Still, volumes are not much higher than 400,000 shares and the ticker is not showing up among the most actively traded, so at least not too many investors have taken up potentially illiquid and depreciating shares.

The company does not cater to the US market and explicitly stated it discourages American clients from accessing the site. Still, if you would like to try your luck on the stock market, if not the Gaelic games, it is good to know the past record of The Stock Brainiac picks. Some of these are cautinary tales.

A previous pick, Crown Management (OTC:CWNM), was also awakened from low activity, and later corrected by more than 60% in a few days. So before choosing to follow the lead of a professional stock promoter, estimate your own capability to absorb losses.