Crown Marketing (PINK:CWNM) – a One-Day Pump-Slump
Yesterday, just before the market opened, another round of pump emails was sent, touting the stock of Crown Marketing (PINK:CWNM). Despite the optimistic tone of the promotions, the stock opened with a gap up that immediately went crashing down and CWNM closed the day over 32% or $0.10 down, below pre-pump levels.
The pumpers first came out to tout CWNM this Tuesday. The stock picked up on the promotional hype and managed to reach $0.31 per share. However, the pump seems to have been short-lived as now CWNM is deflating quickly, despite the optimism of promoters. After The Stock Scout dropped CWNM in their promotions, a number of other pumpers picked it up, among them Club Penny Stocks, who pocketed a very nice $22.5 thousand for their efforts.
The company is a pharmaceutical startup that claims to have a controlled release technology for oral medication. CWNM issued a press release yesterday but all it said was that their patent application has been approved in Japan. The wording may make it sound like they already have a patent there but this doesn’t seem to be the case as no patent number was quoted as well.
The company’s latest financial report is dated September 2012 and contains the following:
- $15 thousand in total assets
- $170 thousand in current liabilities
- $4 thousand revenue since inception
- $11 thousand quarterly net loss
The company is run by a Mr. Learned Hand (sic), who became President and sole director, CEO and CFO when CWNM acquired two patents from another party, issuing 122 million shares and a $140 thousand promissory note that effectively transferred controlling interest to the patent assignor. The most troubling thing about the company that is contained in the latest report is that CWNM has authorized an unlimited number of shares, in both preferred and common stock, and both with no par value.
In theory, this means Mr. Hand has the power to issue 100 billion new shares if he so desires, diluting retail shareholders immensely, or effect a new forward stock split that would bring even greater price volatility with it. While we’re no psychics and can’t know if this will happen or not, the very possibility may be enough to scare investors away from CWNM.
The promoters at Club Penny Stocks touted other penny stocks in the past and their track record isn’t exactly stellar. Last July they ran a pump job on Life Design Station (PINK:LDSI) that ended up in complete disaster for everyone who bought in on the hype. Immediately after the pump ended, the stock dropped dramatically and is now trading at $0.0007 per share, over 98% down from the pump peak.
Investors should be really careful with promoted penny stocks and be aware that stock promo campaigns create wild, unpredictable swings in price that are almost guaranteed to result in devaluation in the long run.
