Sibling Entertainment Group Holdings, Inc. (OTCMKTS:SIBE) Peaks on PR Activity

Sibling Entertainment Group Holdings, Inc. (OTCMKTS:SIBE) seems to be going through a revival, pushing off rock bottom in the past month, and marking robust volumes unseen in the past. On Wednesday, SIBE added more than 22% to stand at 36 cents, on $390,000 buying volumes. The company has not seen active email promotion, but there was a series of press releases marking a revival of business activity, some restructuring of the company and updates on acquisitions.

The past two days for this app-making company came with record buying volumes. This is strange, given that the last press release came on July 23rd, so there is no clear reason to which to ascribe the climb. The message boards are so far silent, so let’s see if there is something fundamentally attractive about this company, found in the financial information:

• $1,654 cash

• $732,919 total current liabilities

• Zero revenues

• $178,803 net loss for the last reported quarter

This educational company is so far not burning through too much cash, although it has problems with net losses. The company mostly focuses on offering software and other technological solutions for charter schools, and it may be a while before active contracts materialize.

But even with all the bright promises on helping the educational sector, SIBE is mostly reacting to the more lively line of press releases in July. SIBE started the month at a mere 7 cents and now after large daily swings managed to settle at 36 cents. Despite the good period, SIBE shows a propensity to lose up to a third of its value.

SIBE may hold longer-term potential, with an innovative business model. Yet sudden bouts of activity and price climbs are always suspect events, which may bring an inevitable correction. On the plus side, the company is capped at just $7 million, with just 19 million shares outstanding, and an unknown free float. Daily trade is relatively small, below 500,000 shares, and the record buying is 1.5 million shares.

During 2011 and 2012, insiders acquired significant numbers of shares, at prices below the current market levels. This may pose a risk for selling.

A previous, more active company offering tech solutions to schools is Ice Web, Inc, (OTCBB:IWEB). This higher-tier company builds connectivity systems, and besides a solid business, was heavily promoted. The ticker is making a similar recovery in July, and we have to wait and see if it is just a dead cat bounce.

Whatever the industry you choose, keep in mind that penny stocks are generally volatile, especially when publicity is involved. Choose SIBE only if you can afford to wait out or waive the rough patches.