Hot Stock Profits Calls the Tune on Spare Backup, Inc. (PINK:SPBU)

With high-quality news reports becoming an increasingly scarce online source, we have more or less embraced the idea of paying subscription fees in exchange for premier stuff. In pennyland, some people also pay for online content. However, there is a catch: he who pays the piper calls the tune. If you substitute ‘he’ for ‘third party’, ‘piper’ – for ‘promoter’ and ‘tune’ – for ‘promotional content’, you will easily separate the sheep from the goats.

So let us figure out the main protagonists in the brand-new pump job on Spare Backup, Inc. (PINK:SPBU) are Hot Stock Profits Team (HSP), on the one hand, and a mysterious third party which might potentially hold a stake in SPBU waiting to capitalize on the pump. The publication itself cost $3 thousand and it is designed so as to present SPBU shares as an attractive investment opportunity to traders. This is where you should beware of making hasty decisions about SPBU stock as it is by no means as perfect as the HSP Team suggests.

For a start, SPBU pretends to be developing online backup solutions to both individual and corporate customers. A lucrative niche, one might think. How lucrative, though? According to SPBU‘s latest quarterly report, the company has a working capital deficit of $11.7 million and this deficit should be extinguished within the next 12 months. Considering that the company’s total assets barely exceed $0.2 million, we wonder how exactly it will pay off its debt. Here are some more financial highlights as set out in the company’s latest 10-Q report covering the period ended Sep. 30, 2012:

• accrued payroll taxes: $4.4 million
• quarterly revenue: $66 thousand
• R&D expenses: $216 thousand vs. $755 thousand spent on salaries
• net quarterly loss: $1.02 million
• accumulated deficit since inception: $119 million.

As it turns out, SPBU dos not have sufficient funds to realize the full potential of its business. In fact, the company is totally unable to even get the ball rolling. You cannot gather this from paid advertising campaigns, though, for the latter are solely aimed at benefiting select stakeholders at the expense of pretty much everyone else.

To wrap it up, let us take a look at some of HSP’s previous promo picks to see how they performed on the charts once the promotion started picking up speed:

• Converge Global, Inc. (PINK:CVRG) – promoted on Jan. 15, CVRG shares went down 25% during the corresponding session alone and have since depreciated by a whopping 82.5%.
• W Technologies Inc (PINK:WTCG) – touted on Dec. 12, WTCG shares lost 28.5% of its value on day one and is currently 60% down in comparison with its value prior to the promotional campaign.
• Vitamin Blue Inc (OTC:VTMB) – pumped on Jan. 9, VTMB had just suffered yet another promotional blow the day before. To date, VTMB has written off 75% of its market value as a result of those pumps.

Given the financial blackhole SPBU currently is, the company has no strength whatsoever to dampen the third party’s enthusiasm about the stock. The latter will do their best to get rid of their shares at high tide, leaving a lot of novice traders empty-handed.