Petrosonic Energy Inc (OTCMKTS:PSON) Is Proving A Tough Nut To Crack

Right from the get go Petrosonic Energy Inc (OTCMKTS:PSON) looked like a perfect target for a pump campaign. Until May 2012 the venture was called Bearing Mineral Explorations Inc and during its short life, it managed to make no impact on the industry whatsoever. Trading was also pretty much non-existent and probably that’s why the new management team lead by Mr. Art Agolli decided that this is the perfect starting point for his new company.

As always, an acquisition took place, the name and the ticker symbol were changed, some new people took the helm and the compulsory stock split was performed. With all the prerequisites there, it was not that surprising when a heavy promotional campaign started. But who profited from it?

Well, it could be the stockholders holding around 2.6 million shares valued at just $0.15 per share. It could also be the ones who got around 12.6 million shares valued at $0.25. Then again, it could have been the ones who knew exactly what’s going on and timed their trades well.

What about the people who got burnt? Well, there’s lots of them. The pump lasted for months and although the last email we received is dated July 10, the pumpers might surprise us at any time and try to give the price another boost. At one point in February the ticker reached as high as $1.46 per share so it’s fair to say that the job of artificially pushing the price up was done rather well, which in turn, gave the people holding the cheap shares a lot of opportunities to cash in and left retail investors with some rather pricey positions.

What happened after that however, is not seen every day. Just like virtually every pump job, PSON‘s promotion ended in a catastrophic fall but this time, the main cause was a scandal relating some of the people who were incredibly excited about the start up venture. We are of course, talking about Mr. Tobin Smith.

As we mentioned in previous articles, he was a major player in the whole touting and the fact that he worked as a commentator for Fox News, gave the whole thing a lot of credibility. It shouldn’t have, because you can see from the fine print under his so-called research that he was paid to do his due diligence on PSON and, as we all know, these kind of paid reports usually miss some important things like the lack of revenues and the huge losses. As you might have guessed, Mr. Smith’s coverage on PSON was no exception and as soon as Fox News saw that and read through the disclaimer, they showed him the door.

The effect was quite catastrophic. The news of his ousting from Fox hit the websites around June 18 and in a matter of just three days, the ticker wiped out around 45% of its value. With that in mind we, as well as quite a lot of other people, thought that it was all over for PSON and its promotional campaign. But it wasn’t.

Other large-scale pumps like Lot78 Inc (OTCMKTS:LOTE) and Northumberland Resources Inc (OTCMKTS:NHUR) also fail catastrophically but unlike PSON, people seem to forget about the whole thing rather quickly, the trading volume starts to go down and a few months later, they are nothing but a bad reminder that such practices can have a devastating effect on your pocket.

Yet, PSON seems to be holding on and despite the latest emails still quoting Tobin Smith’s name (whose credibility took a massive blow when he was fired from Fox), the interest in the ticker remains relatively strong which means that it crops up every now and then in the list of the most heavily traded penny stocks. The overall performance is not that bad either and although yesterday PSON lost around 10% of its value, it did register quite a lot of green sessions beforehand.

Despite that and although the pump seems to be finally over, we’re not ready to bet money on some sort of consistent growth since right now, the only thing PSON have to show us is a series of overly optimistic press releases and predictions that don’t always turn out to be 100% accurate.

If you are not sure what we mean, you can check out this press release and in it, you’ll see that back in January PSON‘s CEO, Mr. Art Agolli expected revenue generation to start by the end of the first quarter of 2013. The 10-Q covering this period however, shows that his predictions might have been a touch awry. The same goes for Tobin Smith’s price targets as you can see, and this all means that you should think very carefully and go through all the options before going anywhere near PSON.