UOMO Media, Inc. (OTCMKTS:UOMO) Burns Investors, Slashed by Half

Without a warning, the stock of UOMO Media, Inc. (OTCMKTS:UOMO) was slashed in half, just as a day of record buying was followed by matching selling. The reason is easily seen: a series of emails from the past few days, and just the right opportunity to sell. David Cohen was among the latest pumpers, receiving $30,000 for his efforts this Tuesday. UOMO lost more than 49% on Tuesday, to stand at $0.023 on dollar volumes a bit above $188,000. The new day also started with tentative selling.

The total budget for the UOMO campaign reached $40,000 for 24 emails. It seems that the company’s deep involvement with the world’s musical industry was not enough, and UOMO needed a boost from promoters. UOMO claims to have worked with the biggest stars in the music and entertainment industries, though this left it with modest financials:

• $6 thousand in cash

• $1.6 million in current liabilities

• $1 thousand in quarterly revenue

• $77 thousand in quarterly net loss

And now that we’ve ween UOMO as nothing more than a small-scale operation, we need to remind you that the stock has seen promotions in the past months, and there was always massive selling after the ticker was touted. At two cents, at least UOMO is now cheap enough that a recovery may happen naturally, just because the stock is more affordable than the 20-cent levels at the beginning of the year.

But UOMO remains a disproportionately inflated ticker, and we would gladly repeat our warnings about it.

Our rule of thumb is that big promotions end in a very sad fallout. We just had a recent case of a ticker being bought up with cheer, only to be dumped on two consecutive days, losing more than half its value. That was Alkaline Water Co, Inc. (OTCBB:WTER), a water producer that was not pleased with just selling water. So WTER sold its stock to inveterate investors who happened to receive its paper mailer. WTER was shot to above $1.10 with the $3 million campaign, only to retreat toward 40 cents, again opening lower.

A similar move was made by Arch Therapeutics, Inc. (OTCBB:ARTH), also a promising company, which held above the dollar for a while, but slid down to 40 cents, where it hovers now. While ARTH was not dismal, the promotion brought it to unsustainable heights, and then the crash was almost inevitable.

In the case of UOMO, the most of the drama is already over. If you are attracted by the low price, keep in mind that right after promotions, penny stocks sometimes burrow down even below the penny levels, and the losses may widen to more than 90%. A low price is no guarantee, so avoid investing sums you cannot afford to lose.