Raystream Inc (OTCMKTS:RAYS)’s Dumping Fiasco

Raystream Inc (OTCMKTS:RAYS) is one of those companies in the OTC Markets that had its day of trading at a good price above $2 per share, but that day is long gone as their stock is slumping at the bottom of the charts with no chance for the return of its former glory.

Yesterday’s session went extremely well for their stock, price-wise as it gained a whopping 215% from their previous day’s close of $0.0013. The dumping of stock was massive as a total of 132 million shares switched hands as the price went up from $0.0015 at market open to $0.0041 at the final bell, which is quite a lot considering their average volume of 30 million.

The total trade value generated by the huge volume came at $412 thousand, a sum that we think the insiders dumping the stock would be happy with. Someone from RAYS woke up really early yesterday (or didn’t sleep at all) in order to compose a press release with an update for the shareholders and the investment community and post it in 06:30 AM. This might be the reason for the huge jump in their stock’s price, because strangely there was no promotional campaign, at least not through the usual channels. Of course, there might be a paper mailer pump, but there is still no evidence supporting this claim.

Again, they are bragging about their HD video conversion software, however, this time it is a project for a cloud-based one that is allegedly 98% complete. At least they are not saying it is unique and they are the only company that has it as a product after they were exposed for doing so with their previous HD video conversion software, which turned out to be related to the AVC/H.264 video codecs and we found several companies that specialize in such products.

Another thing that should raise the red flag for any investor is the lack of responsibility of the company’s CEO’s that are being switched like handkerchiefs. By lack of responsibility we mean that they are a not filing their reports timely with the SEC and recent financial data is available. They are marked with the red triangle in the OTC Markets that is used for such companies, which puts them in the OTC Pink Limited Information tier. This is because the last quarterly report that they filed was for the period ended July 31, 2012 from which the numbers of prime interest you can see listed below.

• cash: $5 thousand
• total assets: $1.7 million
• total liabilities: $1.5 million
• revenue: $0
• net loss: $759 thousand

They don’t seems to be doing very good when it comes to their financials, but it’s unknown how things are going more recently. It’s more likely that they are not going well, because if they were they wouldn’t miss out the bragging opportunity. Furthermore the officers that come and go from the company are usually connected to other companies that were subjected to promotional campaigns followed by heavy dumping of stock. An example of that is the current CEO of REYS, Delmar Janovec, who is the man at the helm of AmeriResource Technologies, Inc. (OTCMKTS:ARIO), a company that is virtually dead from September, 2008 when their stock hit rock bottom at $0.0001 and hasn’t moved since. The information about RAYS doesn’t really give a good perspective for any long-term investments, however, be sure to do your due diligence if you have decided to make a short-term one and be very careful, as the stock is one of the riskiest in the OTC Markets.

On the other side of things, ALAS International Holdings, Inc. (OTCMKTS:VDSC)’s session yesterday went terrible after the good 3 day run the had, as they dropped 39% and are currently traded at $0.0075.