NeoMedia Technologies, Inc. (PINK:NEOM) Repeats Buying Spree on 2012 Results

Although the March Madness and the April Fool should be gone by now, investors are once again mad for NeoMedia Technologies, Inc. (PINK:NEOM), which at $0.0012 seems so low that an upward swing is inevitable. The spree after the long weekend matched the buying volumes seen back on Febryary 6th, and the most probable cause seems to be the announcement of financial results for 2012. Currently, NEOM is outside a promotion, but the flurry of activity is strongly related to the sub-penny price, which is affordable and promises fast gains.

Let’s see how this pink sheet is doing in the world of fast new technologies:

• $2.3 million revenues

• $5.4 million operating loss

• $611,000 cash

• $2.65 million convertible debentures

While the company is in a booming new field, providing barcodes to be read by smartphones, it is still making losses and relying heavily on convertible debt. This is a red flag, since conversion can create significant insider holdings and affect market price, should the owners decide to sell. Also, the adoption of 2-dimensional barcodes is going slower than expected, the company’s CEO Laura Mariott said. Barcodes are thought up as additions to advertising and marketing, allowing the consumer to scan them with a mobile phone and receive additional information.

So far NEOM has not seen a paid promotion, not since the end of March, 2012. And the pumps actually did harm to this otherwise ambitious company, triggering selling and pushing the stock from 6 cents to double-zero levels. Added to this is a rising debt burden, dwindling cash and the potential for future share dilution, which may push the ticker into the three-digits hell.

But perhaps the biggest red flag for NEOM is that it is yet another business that relies on people’s time and attention, a resource that is wearing thin as more and more technologies call for the user’s interest. Also, smartphones do not have a united standard for reading 2D codes, and only Japanese operators have tried to unify the standards, resulting in better acceptance of the technology.

After the long weekend, new promotions have sprung, and taking up NEOX is not too far-fetched, so we may expect to see this ticker in an email. Currently, the penny stock dealing in web technologies is WebXU, Inc. (OTC:WBXU), but unfortunately it is not faring well amid the increased interest. Someone is using the promotion to place unwanted shares, sending the stock down 25% in two days, with volumes 20 times the usual daily selling. In case of promotions or risky, attractive bets like NEOM, it is best to be prepared for disproportinate movements and be certain you could afford the losses.