Is The Ongoing Pump for Yappn Corp. (OTCBB:YPPN) Fake ?
Last week was a turbulent one for the stock of Yappn Corp. (OTCBB:YPPN). They gradually began picking up speed and on Thursday made a 33% increase almost reaching a dollar closing at $0.95. On the next day the ticker opened strong but promptly began plummeting down and barely stopped its slide at $0.72 come closing time.
The multy-day positive run and the significant fall may be explained with the pump going on for YPPN. At the end of May a whole new site dedicated to advertising them was created. Although it looks rather uninspired and nothing more than an average pump email, the disclaimer at the bottom of the page is quite interesting. Apparently Catalina Advertising Corporation are planning to spend more than $2 million on a widespread promotion. The reason for this generosity must be the 6 335 000 yppn common shares owned by the officers and directors of CAC.
With such a massive sum on the line it was no surprise when on June 6 investors began receiving mail advertising Yppn. What no one expected though is that it would consist of only one folded page… It appears CAC are having second thoughts and are quite reluctant to pay for the distribution of more presentable materials.
The financial situation of Yppn looks even less lackluster. According to the later quarterly report for the period ending February 28, they had :
- zero assets
- zero revenues for the last two years
- $10 000 net loss
Granted, back then they were still known as Plesk Corp. and were trying to import consumer electronics, home appliances and plastic house wares. But as of March 28 they moved on to the social media business after purchasing the Yappn web platform from Intertainment Media, Inc. for $7 million, or 70 million common shares as it were the case. It shouldn’t take too long to determine how successful the new venture will be because it is currently in closed beta and should be launched at some point in the summer.
Yppn do have some strong points but they are almost drowned in the red flags surrounding the company. Their social media has potential to attract users due to its multy-lingual capabilities allowing people speaking different languages to participate in the same discussion and to understand each other. But how many are they going to be when the social media sector is dominated by the giants Facebook and Google is a whole new question.
For now the stock is considerably overpriced having in mind the underlying fundamentals of the company so there is a lot of room for it to fall when it starts to correct.