Prince Mexico S.A., Inc. (OTCMKTS:LUVE) Leaves a Smoking Crater, Pumpers Apologize
After riding a stock pump for a couple of days, Prince Mexico S.A., Inc. (OTCMKTS:LUVE) burnt a hole in many investors’ pockets yesterday as it took a nose dive immediately after the open and trundled downhill for the remainder of the session, to close the day precisely 60% down.
We covered the pump in several articles as the influx of promotional emails mounted to about 70 touts for LUVE in just three short days. The stock climbed as pumpers advertising LUVE touted the hot sector the company is switching to – namely, sporting goods. Both promoters and investors seemed to have forgotten the fact that LUVE is a Pink Limited Information enterprise that lacks a Q1 filing for this year even though it’s almost the end of Q2.
They also seem to have neglected spending five minutes going through what information the company provided in its latest available report dated December 2012:
- $8 thousand in cash
- $769 thousand in current liabilities
- $138 thousand in net loss for 2012
Traders who took the time to scan through these numbers before jumping on the pump hype bandwagon could have avoided a nasty burn yesterday. The fact that LUVE keeps squeezing out promising but forward-looking press releases that strangely started intensifying in frequency around the time of the pump possibly helped the stock climb as well. Sadly, yesterday the selloff happened on unprecedented volume that exceeded the cumulative volume of the past 3 months of LUVE trading and everyone who bought during the pump was left with a hole in their wallet.
The crash was so bad that some of the paid pumpers even crawled back out to apologize to their subscribers, with emails titled “Wow… Terrible” and “I come hat in hand”. Sadly, this was probably very little consolation for the subscribers who decided to buy the promoters’ hype just yesterday.
Other percentile failures in yesterday’s market included Petrosonic Energy, Inc. (OTCMKTS:PSON) who crashed 19%, as well as US Energy Initiatives Corp. (OTCMKTS:USEI) who dropped 29%.
The crash of LUVE can serve as a textbook example of what happens when pumps go sour. Traders are advised to be very careful with pumped stocks and always do their own due diligence before investing in any company.
