Sollensys Corp (OTCMKTS:SOLS)’s Run is Shrouded in Mystery
We haven’t written about Sollensys Corp (OTCMKTS:SOLS) for quite some time now, but there is actually a very good reason for this. Before we get to it, let’s take a look at what has been going on around the company over the last year or so.
SOLS was previously known as Health Directory, Inc and, after failing to create a health-related online directory, they decided to start looking for other business opportunities. They found one in the face of Sollensys Corporation – a touchscreen manufacturer from South Korea.
The name was change, the stock was split, and the number of authorized shares was increased. The acquisition of the South Korean entity was completed and SOLS started to look like the perfect candidate for a paid promotion – the company was entering a really exciting industry, the new subsidiary was already a going concern with manufacturing facilities and employees (at least according to the pictures), and they had big plans for the future. As an added bonus, plenty of people held an enormous amount of hugely discounted stock.
Sure enough, the pump started around the end of March. As you probably know, most awareness campaigns use the newsletters as a primary way of trying to lure people in, but in the case of SOLS, the pumpers placed the emphasis on a more unorthodox promotional vehicle – a landing page (which, by the way, is still up and running) with a disclaimer announcing a budget of $750 thousand. Of course, there was some activity on the email front as well, with The Stock Psycho a/k/a Darth Trader being the most prominent outfit to take part.
As you might imagine, the increased hype, aided by a couple of optimistic press releases, pushed the ticker up to levels above the $0.40 per share mark and, at one point, on March 26, it even managed to touch $0.60. A few weeks later, we wrote our latest article on SOLS and we tried to warn investors that the pumpers’ bold claims are not backed up by cold hard facts. Probably because of this, as soon as the artificial hype started to fade away, the ticker began its slide. By the end of May, the share price had fallen to around $0.20.
Trading volumes withered as well and it all looked like SOLS will simply be left there to drop into the triple zero territory. Yet, right now, seven months after the pumpers went quiet, the stock is on the move again. In fact, it’s been going up since mid-September and although there are some signs of hesitation, it appears to be hanging in. Trading volumes also seem to be picking up once again which was particularly noticeable during yesterday’s session when SOLS shifted more than $412 thousand worth of shares.
What’s really surprising about the whole thing, however, is the reason for the interest. More precisely, the lack of such. We see many small cap tickers make sudden and violent movements up the chart fueled by some optimistic news or a new good-looking SEC filing. Sometimes we even see the pumpers revisiting their old picks and trying to give them a new lease of life. SOLS however, seems to be moving without any catalyst whatsoever.
The latest press release is dated April 22 while the latest financial statement covers the fourth quarter of 2012 which means that it has no relation to the touch screen business. The management team did publish a report containing the fundamentals of the South Korean subsidiary but it sported a working capital deficit of around $3.4 million, revenues of just $70 thousand and a yearly net loss of nearly $2.3 million. What’s more, the aforementioned report covers the year ended December 2011 which means that it’s not really indicative of the current situation.
The pumpers are quiet as well. The landing page is indeed still working, but we doubt that it alone is able to propel the ticker on such a prolonged run. This means that the surge from the last couple of weeks is really difficult to explain. Something might be brewing, someone might have some inside information and could be loading up shares. Even a second round of promotions isn’t impossible but one thing is absolutely certain – the ticker is extremely unpredictable at the moment which means that you should be well aware of all the risks associated with a potential investment before putting any money on the line.
And while SOLS seems to be moving without the help of the paid pumpers, other tickers are not so successful. The latest promotional email for Endeavor IP Inc (OTCBB:ENIP) arrived a week ago and it’s clear that since then, people seem to have lost interest in the stock somewhat. Yesterday, ENIP dropped a further 10% and while the volume was still high, it was nowhere near as impressive as the ones witnessed during the peak of the promotion.
