Mikros Systems Corp. (PINK:MKRS) Pumped By Charitable Promoters

In yesterday’s session Mikros Systems Corp. (PINK:MKRS) gapped up, shot up a ridiculous 1200%, then quickly cooled down and closed the day at $0.195 per share – still an increase of nearly 300%. A full-blown rally of promoters touted the stock for no compensation on Monday evening.

A number of promoters including Stock Brain, Hero Stocks, Stock Hunter and Liquid Pennies, among others, sent their subscribers emails touting MKRS and the emails contained pretty much identical text. All of them explained the round of pumping as a free service of Stock Appeal LLC in their disclaimers. The pumps may be an effort on part of the promoters to fix their track record of previous pump crashes but they are still somewhat puzzling.

The company has not come out with any significant news in the last few days, except an announcement that it will be partnering with Northrop Grumman, working on the design of wireless systems in the military CANES program, as one of the several other small businesses selected for the project. That announcement came a full week before the promotions and the price surge, so it can’t reliably be considered a cause for the movement. Before yesterday’s session MKRS traded under 10 thousand shares per day on average. Yesterday saw 5.6 million MKRS shares change hands.

The company’s latest report is dated September 2012 and contains some pretty respectable quarterly figures for a smaller company:

• $871 thousand in cash
• $1.1 million in revenue
• $118 thousand net income

The company has a relatively small number of outstanding shares listed in the report and its market cap is not terribly inflated, even at yesterday’s close. The company may or may not be aware that there is a round of promotions going on, that are causing wild swings in share price. The fact that the promotions are unpaid could mean that the pumpers decided to take the initiative without the knowledge of the company or any third party. Still, the current situation has left MKRS with a hugely volatile stock price – the company shifted up 1200% from its previous close, then down about 60% from the new high, all within a single day.

Traders are advised to be very careful with promoted stocks. Even if the promos are a benevolent move on part of pumpers, the distorted price movement may end up cooling down to or below its pre-promotional levels very quickly, leaving many burned and confused.