Rarus Technologies Inc (PINK:RARS) Get Pumped Sky-High

Rarus Technologies Inc (PINK:RARS) blasted through the roof yesterday when a staggering 45 million shares changed hands. The price gain was just as impressive – 109%. That’s not bad for a company nobody’s ever heard of. Having said that, paid promoters of all shapes and sizes did their best to raise some awareness.

They all received some hefty compensations and the newsletters included the all-too-familiar Stock Mister, TheStockScout, Penny Stock Players Awesome Stocks and a host of others. We’re familiar with their track record and it’s fair to say that we were quite dubious at the start. Nevertheless, we decided to see if we will come across the unthinkable – a promoted company that has something to show. We didn’t.

RARS was incorporated on June 23, 2011 and its their first name was HotelPlace, Inc. One day later, on June 24, 2011, they changed the name to Rarus Minerals Inc. and they became a mineral explorations company. That didn’t last long, though, and around seven months later, they changed the name again. Since then, they have been known as Rarus Technologies and they have been developing their very own social network. So, how are they getting on?

Well, they have a website, two of them, actually: one for the company and one for the social media. None of them gave us much information, and when we decided to see the “Innovation” page of their company website, we only saw how their platform supposedly looks like. In terms of structure, at least, it’s remarkably similar to Facebook. They say that they are also going to incorporate video and voice calls, but we’re struggling to see the innovative aspect of these technologies, since a host of other programs have been using them for years.

That aside, the success of any social network platform depends on the number of users it has. The number of users is directly related to how you market the thing, and marketing requires huge investments. We decided to check if they will be able to make those investments, we opened the latest report covering the fourth quarter of 2012 and we summarized the figures below:

• cash: $4,474
• current assets: $7,382
• current liabilities: $144 thousand
• revenue: $0
• net loss: $33 thousand

It’s safe to say that “huge investments” are out of the question, but that’s not the only issue. Back in May 2012, they signed a contract for the license to use the name of their social media – Zngle (we have no idea how to pronounce it) and the associated internet domains names. The total cost of the license is $22 million (which is quite steep for a website that nobody uses) and the first $2 million should be paid before May, 2013. So far, they have covered just $350 thousand and the way they have been doing so far suggests that the contract might be terminated long before the social network gains any recognition.

Since we mentioned the licensing agreement, we should also point out that, shortly after it was completed, RARS issued a press-release and a number of promoters created a lot of fuss around them. That, however, had little effect on the way the stock behaved and it continued on its downward slope, leaving a lot of disappointed investors behind.

We can also recall another pump – the one for TagLikeMe Corp (PINK:TAGG). The similarities between the two companies are astounding: both companies say that they are developing a social media website that nobody’s ever heard of; both companies have no money and no revenue at all; both companies get promoted every once in a while. The difference is that the last pump for TAGG is now over and you can see the result from the chart on the right.

We’re pretty sure that the same exact thing is about to happen to RARS very soon, so it’s essential to weigh your risks thoroughly before making any decisions.