Petrosonic Energy, Inc. (OTCMKTS:PSON) Slides after Paper Mailer Scandal
We wondered what fueled Petrosonic Energy, Inc. (OTCMKTS:PSON) for its recent climb- it is unusual for a company to just move on its own. In this case, it is a faux analytical report, vaguely disguising a promotion. Recently, a guest of Fox News presented himself as an expert on PSON, hiding the fact that he received $50,000 to tout the company. In addition, PSON is running on an $3 million paper mailer, intercepted at the end of may. This slow mode of promotion may have a longer-term effect as it reaches investors’ doorsteps. 
The mailer has the look of an independent report, featuring Tobin Smith, a long-term commentator known for true independent research on companies and a long TV career. And the same familiar and respectable face appears on emails. However, the campaign worked only a short time, as PSON retreated to $1.03 after losing more than 22%. Mid-week, PSON stopped the phenomenal climb, although nothing is entirely certain, the ticker has easily recovered from similar drops. 
Fundamentally, PSON is a typical development-stage company, hosting some deficits:
- $2.1 million cash
- $3.1 million total assets
- $480,170 total current liabilities
- $763, 237 quarterly loss, zero revenues
When the paper mailer mentions PSON is the future for the petrochemical industry, it means all of its activity lies in the future. The company is still waiting to run its oil refinery, innovative enough to deal efficiently with heavy crude oil. Meanwhile, a lot of investors showed readiness to buy PSON merely on the recommendation of the paper mailer and the emails.
While Tobin Smith received $50,000 for his endorsement, this meant a serious breach of his obligations to Fox News, and his contract as a contributor was terminated. The report, for all its official-looking layout, is a bit too good to be true. It promises a five-fold growth of investment in the next 6-12 months. There is also the promise that the PSON technology may make the USA a world leader in usable oil products. There are many more propositions, most of them more likely to attract inveterate investors. In its reports, PSON is not so optimistic, even mentioning a going concern due to high debt and a lengthy development process.
PSON has a history of previous promotions, but on a much smaller scale. The company announced 2013 as a wonder year, when it would generate earnings, and the large-scale paid campaign is not a surprise.
PSON recalls another current active climber, Wind Power Innovations, Inc. (OTCMKTS:WPNV). The ticker jumped from 1 to 9 cents, sliding a cent on heavy selling this Monday. Northumberland Resources, Inc. (OTCMKTS:NHUR) is another high-volume mover in the energy industry, sliding nearly 6% on Tuesday to 94 cents. Most of the companies are big on promises for future contracts and production. But in the case of PSON, the scandal around the blatant promotion means it is best to stay away unless you can afford the losses once the hype ends. In the case of PSON, it ended a bit too soon.
