The Pump for Crown Marketing (OTCMKTS:CWNM) Heats Up

As of the time of writing this article, we have already managed to intercept 28 emails touting Crown Marketing (OTCMKTS:CWNM) for the umpteenth time and this campaign is shaping up to be a big one. The budget that we calculated so far exceeds $80 thousand and if you read through the emails, you will think that CWNM is a pure gold mine. But is it?

Well, if you follow the world of penny stocks closely, you will probably know that right now, small cap companies are not too keen on drawing investors’ attention in the old-fashioned way (actual success, marketable products, a good financial statement etc.). Instead, we see that a huge number of ventures have decided that the best was to push the tickers in the right direction is to simply come on the news, state that the company is entering the extremely hot industry of medical marijuana and fill up the rest of the press release with almost unreal projections of revenues and profits. That’s exactly what CWNM have done and, of course, the pumpers are again on hand to help spread the word around.

If you are one of the people who believe in the companies’ press releases, things are looking good. Before they started with the medical pot business, they announced on April 24 that their nutraceuticals will go on sale within the next thirty days. Days later, CWNM were happy to say that through their newly formed subsidiary, they will operate in the marijuana business as well. The usual amount of bombastic forward-looking statements, of course, were splashed all over the press release.

And then yesterday, hours before trading began CWNM said that they have signed a memorandum of understanding that will supposedly provide them with the financial support that they need in order to make it in the medical pot business. They said that the other party is a fund that controls around $100million and was established specifically to help emerging companies make their first steps in the marijuana producing business.

That sounds amazing since, as we wrote in our previous articles, about CWNM their two main problems were the fact that they don’t have any marketable products and the fact that they don’t have any money. So now that these two issues are solved, things are looking good, right?

We’re not so sure. For one, we’ve seen many small cap companies that have no money suddenly charge full steam towards the medical cannabis business, and we’ve seen how many times the hype is extremely short-lived. This means that every time we hear about another one taking the plunge, we’re just that little bit skeptical. Take the two charts on the right as an example. The first one is for Creative Edge Nutrition Inc (OTCMKTS:FITX) and the second one is for Latteno Food Corp (OTCMKTS:LATF).

FITX announced the entrance into the medical weed sector on March 25 and while that day’s performance was absolutely smashing, what followed after that was not that inspiring. LATF‘s case is pretty similar although their fall was even more painful. So what is to stop CWNM from following in their footsteps?

You might be thinking that the MOU that they announced yesterday will provide them with the solid financial backing that they need but again, we’re not so sure. As we mentioned in yesterday’s article, some vital information about the memorandum is left out of the press release. Like, for example, the name of the fund that controls over $100 million and will act as CWNM‘s savior, the specific terms of the agreement, the sum that CWNM will have initially and the date on which they will get it. All things that, we reckon, are quite important to the shareholders.

You might be thinking at this point that we’re being too skeptical about CWNM, but here’s the thing – there is a reason for our cageyness: the pump campaign running for them currently. Unfortunately we have seen far too many of those as well and you can have a quick look through our articles from January and February and see what our thoughts were back then. Once you’ve done that, you can check out the chart and you will see that our predictions turned out to be quite close. Unfortunately, we’re not convinced that the new business plan and the optimistic press releases (especially when they are as uninformative as the one from yesterday) will be able to prevent a similar thing from happening yet again.