The Pump for Southern Products Inc (OTC:SNPD) Goes On

The companies in Pennyland are quite diverse. On the one hand, you have quite a lot of businesses with absolutely no future. They have no intention of starting any sort of operations and the people behind them generally use them to make quick and easy money. At the same time you’ve got the tickers that represent business ventures of serious people who have started the whole thing with the idea of actually being successful and ensuring some sort of income in the long run. Southern Products Inc (OTC:SNPD) seem to fit the latter group better than the former one, but we still have some problems with them.

The biggest of which is the promotional effort that has been running for them throughout the last couple of months. The first emails hit the inboxes on February 24. Back then SNPD‘s shares were traded at the respectable price of $0.26 per share. As of the time of writing this article, however, the stock stands at $0.08 which is a loss of a massive 70% in less than two months.

The case of SNPD is interesting because we rarely get to see pumped companies that actually have some potential. If you just have a quick look through their financial statement, you would beg to differ, however, when you check out their historical records, you will find that SNPD were quite serious about their business until about a couple of months ago.

Indeed, the quarter that ended on November 30, 2012 resulted in only $10 thousand in revenue but if you look at the same period in 2011, you will see that back then, the sales amounted to $1.3 million. So, what happened?

It would appear that they had some issues with the Chinese manufacturer for their flat screen TV’s and the contract was terminated. That might have not been such a bad thing for SNPD, however. While their old manufacturer was assembling the TV’s for SNPD, they were working at a constant loss, and now, they need to find a new one.

On March 1, they announced that SNPD‘s CEO is on a business trip to China where he will negotiate a new partner and will also make sure that this time, the terms of the contract are a bit more favorable for SNPD which, in turn, should ensure profits in the future. Then, a couple of weeks later, there was another announcement according to which they have found the new manufacturer for the Sigmac products. They also talked at length about the advantages that the new contractor has and they hint that from now on, they won’t be working at a loss, which should make quite a lot of shareholders smile.

In the midst of all this, they even said that they have secured another contract with Westinghouse Digital Electronics which will allow SNPD to distribute Westinghouse products around the US. This is supposed to be their second source of revenue, and it should have made the shareholders day even brighter.

But what happened to the stock? It continued to fall and the people who jumped in at the end of February are probably quite angry right now. And that’s the main problem – just when people thought that the tables are turning for SNPD, the pumpers came around to ruin everything. That said, they were paid to do it, so we are quite sure that at least one person earned some quick and easy money out of the whole proceedings.

A lot of people didn’t, however, which is why you should always be extremely careful when making your decision on promoted penny stock companies.