Punch Media, Inc. (OTC:PNCH) Hits Selling Time
History tends to repeat itself, and Punch Media, Inc. (OTC:PNCH) entered another slump, with not unusual deep selling dragging the stock down 20% on Monday, to $0.012. The still developing TV content operator climbed almost 4 times this month, even without a promotion, but its extremely underpriced stock may have caused jitters and investors thought it time to cash in. 
The company’s financial reports reveal efforts to spread cable TV content, with a great struggle from debt and the need for investment: 
- $5.2 million cash
- $40 million borrowed funds
- $3 million net income
So far the fall in the stock has not been too big, still showing a certain trust in the possibilities of the rare profitable penny stock company. The past year was extremely successful for PNCH, as the company reached 55 million US households through 35 partner channels. It seems the 2500% reported business growth happened so fast that PNC still posts its old website on the OTC site, where it offered financial services as a banking and investment adviser in the 90s and early 2000’s.
On the OTC website, PNCH states yet another business model, a platform called IC Places, a search tool for restaurants and entertainment in city areas. The website, though, resembles nothing more than an aggregator of news and memes, and it is unknown how it could compete with already established apps and services such as Yelp.
A similarly priced company from the same industry, Halberd Corp. (OTC:HALB) is currently on a downward trend, losing almost a third in one of its habitual corrections. So, while the sector may offer rapid ascension and popularity with consumers, it is always advisable to tone down the optimism and be certain that the inevitable corrections are affordable.
Even without a promotion, underpriced stocks may pose risks in the sort or long term. For Punch Media, the current upward trend is a minor blip in a long period of flat movement, and a price of 1 cent is no guarantee for a rise, as even lower factions of a cent are normal for a penny stock company if investors become disillusioned.
