Darth Trader Launches the CoroWare, Inc. (OTC:COWI)
The internet offers endless potential for business models and while most are unsuccessful, swallowed up by the firstcomers, sometimes it is enough to build a smallcap company. This week featured CoroWare, Inc. (OTC:COWI) coming in with a splash, in a $400,000 promotion that may last for a while, along with messages in news websites and a buzz around the social networks. 
The promotional email starts with the promise that for COWI, even the bashers and haters are predicting a rise in price. The double-zero company added more than 27% on Tuesday’s close, trading at $0.0042. Its very low price is definitely a factor for quick gains and even quicker corrections, if the need arises. 
The relatively low-priced ticker, with a market cap of just $880,000 has also little to offer in terms of financial security:
- $2927 cash
- $18.4 million total current liabilities
- $224,136 revenues
- $206,143 operating loss
CoroWare has some revenues despite the listing as development-stage company and offers an array of software solutions for information delivery, robotics controllers and video conferencing services. The business has customers all over the world, supplying its software to universities, firms and not for profit organizations. This activity, however, is financed with large amounts of debt and debt instruments, and some of the payments and liabilities are repaid in shares, causing dilution.
COWI poses a challenge as a stock, since it is not traded on all platforms and this may have dampened the effect of the mailing. However, volumes rose to 300 million sub-penny stocks, making the paid pumpers claim this company will be going much higher. The first pump for COWI came from The Stock Psycho on January 14th, later to be taken up by related pumper Darth Trader, and the large budget promises the pump may last for a while.
The two pumpers we mentioned have a long history of paid mailing, with an average compensation of $350,000. While most of the tickers spike for a while and fulfill a part of the promise, after the end of the promotion losses deepen quickly. One of the past picks, Casablanca Mining, Ltd. (OTC:CUAU) fell by more than 60% when the October promotion went silent. In cases like COWI, it is best to estimate your own taste for risk before taking up positions in a very volatile ticker.
