Cloud Security Corp (OTCBB:CLDS) Spiraling Out of Control

The pump for Cloud Security Corp (OTCBB:CLDS) is not going well. The promoters have already crushed the ticker once when they tried to inflate the price artificially back in March. Some emails, as well as a landing page or two propelled the stock to an all-time high of $1.47 per share but as soon as the pumping efforts ceased it took a tumble and within a few months, it was back below the $0.30 mark.

The third parties revived the campaign a couple of days ago with a new landing page in addition to a paper mailer brochure, but it would appear that the second round will be quite a lot shorter than the first since, for all intents and purposes, CLDS seems to be in a knock-down. Investors first mentioned the hard mailer reports back on October 3 but instead of giving the ticker another boost, they simply smashed it to the ground. CLDS hasn’t registered a green session since then and the total damage amounts to around 30% after just three trading days. The current value stands at around $0.54 which is quite a long way off the price targets that the pumpers have been spreading around. But what exactly are the pumpers talking about in their reports?

Basically, their main points haven’t changed all that much since the first wave of promotions back in March. Once again, there are some conspiracy claims that some evil organizations are planning a massive cyber attack on the US. CLDS is again compared to big and solid companies like Symantec Corporation (NASDAQ:SYMC) and we can see that their predictions about the future price movement have also remained pretty much the same (they say that by the end of the year, CLDS will hover around $3 per share). All in all, they have failed once to give traders enough confidence to support a more consistent run and now, they are at it again without even bothering to alter their arguments. But is there even a grain of merit to the rather amusing narrative?

Well, let’s take a look at the comparison with SYMC. Symantec is an established company with a share price of around $25, a market cap hovering around $17 billion, quarterly revenue in the realm of $1.7 billion and a net income for the three months ended June 28 of around $157 million.

CLDS, on the other hand, is an enterprise on the OTC Markets with a market cap of around $52 million, a nightmare of a balance sheet (the current assets have shrunk by a whopping 54% over the last quarter) and no revenue since inception. It’s pretty clear that drawing parallels between the two companies is simply not sensible.

As for the $3 per share price target, the ticker is clearly not interested to go that high at the moment and judging by the recent trends, the chances of $0.30 per share in the near future seem much more realistic.

You might argue at this point that if CLDS manage to market their USB thumb drive-like gadgets and their revolutionary software applications that will, supposedly, prevent all sorts of malicious activity on the internet, they could be in for some growth. Indeed, you’d be right, but before you jump in, you should think carefully about the chances of this happening. And while you’re at it, you might also consider the fact that an unnamed CLDS shareholder (according to the latest landing page disclaimer) paid quite a lot of money to increase the awareness around the ticker.

And what happens when someone is splashing out on a penny stock promotion? Usually, the retail investors are the ones who suffer. The charts for Arch Therapeutics Inc (OTCBB:ARTH), North American Oil & Gas Corp (OTCBB:NAMG) and Alkaline Water Company Inc (OTCBB:WTER) are here to prove the point.