VuMee, Inc. (OTC:VUME) Gets a Second Chance

Getting a second chance for a penny stock may seem even more enticing, knowing that the chosen ticker has chances of recovery. This idea boosted VuMee, Inc. (OTC:VUME) as it wiped out gains in the past week, but is inching up again. We almost wrote off the promotion, but the $500,000 campaign is still growing strong and the email on Thursday promises the new streak of earnings will be longer.

Outside the pumpers’ opinions, let’s look at what VUME promises. In 2012, estimates show that online advertising was worth more than $88 billion, and the volume of this industry will grow rapidly, to more than $132 billion. But the question remains- will VUME get a piece of the pie? Let’s look at the company’s financial data to see if it has enough juice to compete:

• $30,297 cash

• $556,322 total assets

• $648,216 total liabilities

• Zero revenues

It seems until now, VuMee has not managed to take a piece of the market with its web-based video service. The former paper products company has not managed to offer anything unique and its web site of celebrity videos is hardly impressive. On the minus side, this activity is mostly debt-financed and unsustainable. 

The latest company press release, coinciding with the pumpers’ email, mentions the site’s traffic jumped 900% in the past few days, which is not unheard of if it was barely visited before. The interest in VUME spikes as it is presented in well-visited business news portals, used as a soap box to tout the promise of a company and its stock. But only time will tell if the newly active site will generate enough advertising revenue to ensure long-term viability. 

The data do not stop Select Penny Stocks from jumping on the new trend and inviting investors to join this time. The latest email compares VUME to another great pump from the end of last year- Pac West Equities, Inc. (PINK:PWEID), a company with virtually nothing but promises which nevertheless went up 1700% after an initial fall. But not all promoted tickers are that lucky, and PWEID was a giant exception. Still, its stock lost 75% of its value to trade at a lower range, and since the selling is in small volumes, a lot of investors are holding millions of shares with lessening chance of placing them. 

Despite the promises, VUME remains a ticker with a potential for significant daily falls, so it is best to estimate your own preferred level of risk before investing.