Pingify International Inc (OTCBB:PGFY) Burnt to a Crisp

Ever since Awesome Penny Stocks decided to retire, the stock promotional world has been on the lookout for the next most influential pump outfit. Stock Tips looked like a worthy contender for the crown, but unfortunately, with their latest pick, Pingify International Inc (OTCBB:PGFY), they made a rather big hash of it all.

The $6.5 million campaign started on May 2 and, somewhat predictably, it drew in quite a lot of attention. On Friday, PGFY managed to jump by no less than 210% while logging a dollar volume of around $2.4 million. The pumpers seemed pretty happy with the results, but reckoned that more can be squeezed from the stock. Mike Statler, Stock Tips’ fictional co-editor, sent out an email about an hour before Monday’s opening bell stating that he wouldn’t be surprised to see PGFY climb to $5 per share. $5 might have been a touch too optimistic, but the ticker did manage to register another exciting session. More than $30 million worth of shares changed hands and PGFY closed the day at $1.37.

At that point, the market cap was closing in on the $70 million mark which was an absolutely ridiculous evaluation considering the company’s horrid financials, but regardless of this, some people believed that the stock could go even higher. The British Columbia Securities Commission (BCSC) had other ideas.

After Monday’s closing bell, PGFY‘s management team announced that the BCSC has warned them about the heavy promotional activity. They said that they have nothing to do with it, but despite this, the ticker took a heavy blow during the following session. In just six and a half hours, PGFY managed to lose more than 40% of its value while the dollar volume at the end of the day stood at well over $9 million.

After the bloodbath, Vlad Milutin, the company CFO, decided that he has had enough. He issued a press release with which he announced his resignation and said that he can’t bear to watch investors lose any more money. He also publicly urged the SEC and FINRA to investigate the matter and suggested that the people standing behind the whole things are the investors who received 25 million PGFY shares at $0.005 a piece back in January 2013.

Many traders were expecting the regulatory organs to take action before yesterday’s opening bell, but instead of suspending PGFY, the SEC decided to put an end to another penny stock fiasco – Cannabusiness Group (OTCMKTS:CBGI).

With trading still active, there was only one direction for PGFY – down. In a matter of six and a half hours, the ticker shifted nearly $2.6 million worth of shares and incinerated another 56% of its value. Currently, it stands at $0.35 which is exactly 74% below the hype-induced high reached on Monday.

With Mr. Milutin gone, the only person steering the sinking ship is the CEO, Jason Gray. And he seems to be trying hard to clean up the mess. Yesterday, he issued no less than three press releases. The first one informed us that he has received the CFO’s resignation, that he’ll have a look at it, and that he’ll update the shareholders with his views on the matter. The second one announced the signing of a letter of intent for the acquisition of an entity called 80 Elements Entertainment. In the third one, he expresses his opinions on Mr. Milutin’s resignation.

Apparently, Mr. Grey is inclined to disagree with the former CFO on some things. He says that his company has agreements in place with entities like eBay Inc (NASDAQ:EBAY) and Beyond.com. He also states that all this information has been disclosed in the S-1 filing which was published when PGFY was going public. For reasons that are not very clear, he fails to mention the fact that through the same exact document, his company sold 25 million shares at just $0.005 a pop.

The only positive thing about PGFY at the moment seems to be yesterday’s letter of intent. If they manage to close the acquisition, they could bring in some revenues, but unfortunately, nothing is official as of yet and the company’s reputation seems to in a rather poor state after the pump fiasco. Although the SEC let PGFY run yesterday, a suspension is still not out of the question which is just another reason to consider the risks of a potential investment before putting any money on the line.