Sanborn Resources Ltd (OTCBB:SANB) Feeling The Pressure
Just like Arch Therapeutics Inc (OTCBB:ARTH), Sanborn Resources Ltd (OTCBB:SANB) failed to end the week on a positive note and ensure a more relaxed weekend for their shareholders. After an impressive run that started on July 5 (which, by the way was SANB‘s first properly active trading session), the ticker logged quite a run and for a full week, it never registered a day ending in the red. Friday, however was a little bit different and just like ARTH, it opened the session a hair above Thursday’s close at $0.61, hovered around the intraday high of $0.625 for a little while but then it all went pear-shaped. When the closing bell rang SANB was standing at $0.529 which means that the total losses amount to around 12%. Truth be told, this isn’t such a dramatic drop and people who trade penny stocks are quite used to such movements, but it is still pretty unpleasant considering the nice progress that we saw during the first week of July.
At the same time, it was bound to happen. We already covered SANB a couple of times and if you have a quick look at our articles, you will see that they are currently being promoted. More importantly, the budget is no less than $3 million. As we also mentioned, the promoters have decided to take on a more unconventional approach to the campaign and instead of the usual mailing activity and paper brochures, we only see an article about SANB on a website called Financier Times. At first it doesn’t even look like a pump but when you scroll down below the comments, you will see that there is a disclaimer posted in an annoyingly fine print stating that an entity called Central A Marketing is handling the $3 million budget. That’s quite a lot of money and the pumpers will probably employ some other vehicle for spreading their optimism around, but the more important question now is: “What will happen to the stock?”.
Well, we’ve seen similar pumps unfold and when the budget is this big, the run usually lasts longer than a week. If you take a look at the chart for Northumberland Resources Inc (OTCMKTS:NHUR) on the right, you will see that there were a couple of big spikes and the ticker registered its 52-week high of around $1.70 back in May – a couple of weeks after a similarly optimistic article about them went online in the same exact Financier Times website. The promotional budget was also $3 million but that in no way means that SANB will display the same performance as NHUR.
One thing that we have yet to see from SANB is a press release. Often when there’s a stock promotion, the featured company jumps in on the hype making optimistic announcements about projected growth, operational performance etc. If SANB do the same thing, they might raise the interest in the ticker a bit further and that will probably also bring a green session or two. Some more upward movement might also be seen if the pumper decide to ramp up the campaign and start sending out emails, paper mailer brochures or coming up with landing pages. Once the hype is gone, however, the ticker will probably hit the ground hard and if you’re not careful you might end up seriously burned.
NHUR‘s chart from above should be proof enough, but just in case you’re not convinced, we did a little research on the company and we found some rather interesting things. Like for example this link from which you’ll see that Suite 800 in the West Tower of the building located on 777 South Flagler Drive in West Palm Beach, Florida (the address of SANB‘s corporate headquarters) is offered as a virtual office.
If you have read through our article on SANB from July 10, you will also see some other red flags and they’re mostly connected to the company CEO, Mr. James Dale Davidson who, by the way, is at the helm of two other penny stock gold mining ventures – Valor Gold Corp (OTCBB:VGLD) and California Gold Corp (OTCMKTS:CLGL).
Today, we decided to check on the other officer listed on the OTC Markets page for SANB. His name is Adam Wasserman, he is the CFO of SANB and, as it turns out, he is connected to some other small cap ventures as well. Namely, Apps Genius Corp (OTCMKTS:APGS) and Money Centers of America Inc(NDA) (OTCMKTS:MCAM).
A quick look at our database reveals that APGS have been the target of paid promoters numerous times and an even quicker look at the chart on the right shows that the results are pretty appalling. As for MCAM, they have the skulls and crossbones badge on their OTC Markets profile and while we weren’t able to find the reason for it, we’re pretty sure that the Caveat Emptor sign pushed the ticker deep down in double-zero territory.
All these things, along with the huge promotional budget means that the risks are extremely high and we would recommend that you consider all of them carefully before investing any money in SANB.
