The Solar America Corp (OTC:SOLX) Story Repeats Itself
Renewable energy – two words that have been used and abused over the last couple of years and there is a good reason for this. The world’s energy resources are indeed running out and if we want to ensure the future of mankind, we’ll need to find different ways to meet our ever-increasing thirst for power. The pursuit for new energy-producing technology has been quite hot in the world of penny stocks as well, and perhaps this is why promoters of all shapes and sizes are constantly pumping companies from the renewable energy sector. The thing is, most of the times, the emails are full of claims that this or that company has developed a technology that you have never ever seen before. Solar America Corp (OTC:SOLX) have taken on a more conventional approach.
As the name would suggest, they are producing, marketing and selling solar panels that will help with the electricity bill, but will also give out some hot water. We know that the technology exists, it’s been developed for decades and we know that it works. So, how are SOLX getting on?
Well, we wrote about them about a month ago when they were promoted and we saw that some financial clouds are hanging over their solar panels. According to their filings, the third quarter of 2012 yielded very little in terms of revenue, and when you put in all the costs, you were left with a considerable net loss. Now that they are pumped once again, we decided to check in they have filed a new report with some more optimistic financials.
They haven’t.
It’s not all bad news, though. In our previous article we mentioned that their corporate headquarters is actually a two-story residential house. A couple of days later, SOLX‘s management announced that they have changed their business address and they are now located in Gulfport, Mississippi from where, they say, they will be able to better control their business. It still doesn’t look like much, but it’s better than before.
In addition to the new office, they also issued quite a lot of press-releases, and if the announcements are anything to go by, things are looking up for SOLX. They are now on their way to start work on some projects in Mexico and they speak at length about how profitable the solar energy business in that particular country could be.
The thing that worries us most, however, is the fact that last time they got pumped, the emails were again garnished with a lot of promising news. Yet, once the excitement was over, they crashed losing 20% in a single trading session. Yesterday, the story was pretty much the same – there was some abnormally large volume and by the end of the day, SOLX‘s shares were 18% cheaper compared to the previous close.
Which is why, the new CEO should focus his efforts not on putting out a ton of optimistic news, but on providing the shareholders with some valuable information in the form of a new financial report. Of course, he should also make sure that there is some net income in there too.
We have seen many ventures like SOLX who are obsessed with publishing all sorts of promising statements but, once the hype is gone, they all crash. One such company is Domark International Inc (NDA) (PINK:DOMK) and the similarities between them and SOLX don’t end there. They were also a target of a paid promotion in November 2012 and they are also in the solar energy industry. Yet another coincidence is that both ventures have no money which means that they were forced to issue some promissory notes to an entity called Infinite Funding, Inc.
While there is very little information about Infinite Funding, looking through forums like iHub, we can see that investors are not too sure about their legitimacy. This is why, although SOLX are constantly talking about moving in the right direction in their press-releases, you should still conduct a thorough research on them before jumping in.
