The Stock Brainiac and Compliance Systems Corp (PINK:COPI) Raise the Stakes
It’s no secret that buying and selling penny stocks is a bit of a gamble. People who trade them apparently love risk and some of them end up badly burned while others make substantial profits. Pumpers are aware of that and when they get a chance to promote a company like Compliance Systems Corp (PINK:COPI), they are only too happy to oblige.
Until the end of October 2012 COPI was a shell company with no operations whatsoever. Naturally enough, their financial statement for the third quarter of 2012 is about as bad as it gets. The numbers pretty much speak for themselves:
- cash: $ 130
- total assets: $ 130
- current liabilities: $ 1.47 million
- no revenue
Seeing this financial statement will make many investors simply walk away, but we should point out that there have been some developments around COPI since then. Back in October after some issuance of shares, and a lot of agreements, they acquired about 70% of an Irish company called Seaniemac Limited. According to The Stock Braniac’s (TSB) email, this is where COPI struck gold. Seaniemac have been developing an online betting and gambling platform that, if TSB’s email is to be believed, is going to bring COPI some huge revenues, and will finally put them on the map. You shouldn’t believe The Stock Braniac’s email, though.
Recently, COPI filed the necessary 8-K report in which they disclose the details of the acquisition and in there you can see that most of the statements in the promoters’ email have nothing to do with reality. For one, TSB claim that Seaniemac have a functioning website and that they own one of the largest online poker platforms. The 8-K however, shows that the website is still in its Beta version and will not be fully operational until Q2 of 2013. Just like COPI, Seaniemac have not registered any revenues since inception, either. The emails also states that the platform is aimed at the global market, whereas the report implicitly shows that the target audience of the website is primarily from Ireland and the UK. To lure you into thinking that COPI is a viable investing alternative, TSB refer to the US online gambling market and they say that it will soon be worth $10 billion. Seaniemac, however are having none of it, and they say that the website will not be available for gambling and betting from the US since they are unable to meet all the regulations.
You might be wondering: “Why on earth did The Stock Braniac go through the trouble of writing all these misleading statements (putting it mildly)?” Well, they did receive a hefty compensation for it – $50,000 from a company called Summit Trading Limited. Here’s another question: “Why would Summit Trading want to pump COPI?”. The answer: because they have received 3 million freely tradeable, shares as a settlement of debt back in July. Next question: “Will they sell them at a profit?”. We can’t be sure, but if we had to guess, we would say “Yes, definitely.”.
A lot of bad marks both for COPI and for The Stock Braniac. Still, if you have not been convinced yet, you can take a look at one of the previous picks pumped by TSB. They were among the promoters, who advertised New Western Energy Corp (OTC:NWTR) between January 3 and January 5. You can see for yourselves what happened just days later and you can just imagine how many people got burned.
Having in mind deviations form the truth contained in The Stock Brainac’s email, and especially when you consider the fact that owners of 3 million shares are paying $50 thousand for the promotion, we are pretty sure, that there are a lot of investors bound to get the same treatment. That’s why we would recommend that you be particularly careful with this one.
