Crown Marketing (PINK:CWNM) Pump by the Stock Scout Revs Up
A new pump is making the rounds, one that targets Crown Marketing (PINK:CWNM), a penny stock company with grand claims that it plans to make a difference in the world of pharmaceutics. The pump was put in motion on Tuesday and continued yesterday, when CWNM closed up 29% and reached $0.31 at the bell, on a volume of nearly 4 million shares.
The Stock Scout, one of the promoters currently touting CWNM, disclosed a compensation of $25 thousand, handed out to pump the stock. While the promo email contains a lot of forward-looking statements and information about how the company’s supposed sustained release technology for oral medication could be a success, it fails to mention some of the more troubling aspects of CWNM. Looking past the hyped up press release of the company that contains little more than an optimistic outlook on the future, the company’s latest filings contain several disturbing items.
The latest report available is a 10-Q for the period ended September 2012 and it contains the following figures:
- $15 thousand in total assets
- $170 thousand in current liabilities
- $4 thousand revenue since inception
- $11 thousand quarterly net loss
The company issued 122 million shares and a promissory note amounting to $140 thousand to another party for the assignment of two patents. This effectively made the patent assignor the controlling entity. Mr. Learned Hand (sic) became CWNM‘s sole director, CEO and CFO in the process.
The most unsettling part of the report is probably the ‘Stockholder’s deficiency’ section of the report. That explains the company has authorized an unlimited number of both preferred and common stock, both with no set par value. This in turn means Mr. Hand, who seems to run the company single-handedly, could potentially issue any number of new shares for financing, greatly diluting retail stockholders, or effect a new big forward stock split that would bring greater price volatility.
The Stock Scout ran other pump jobs in the past and their performance doesn’t really help the promoter’s track record. One such pump was the unfortunate campaign on Gunther Grant, Inc. (PINK:GNGR). The promotion landed The Stock Scout a hefty $50 thousand in compensation, despite the fact that the stock crashed miserably when the pumping ended and is now over 90% down from its pumped peak.
Investors should always be very careful with promoted penny stocks, as promotional hype creates volatile price swings that are largely unpredictable. Do your own research and stay safe!