Petrosonic Energy Inc (OTCMKTS:PSON) Resurfacing

15PSON.pngPromoted small cap ventures. Normally they’re not the best place for your money. The curve followed by their tickers is always the same – a brief peak when the artificial hype around them starts to get traders excited followed by, in most cases, a sharp and violent drop during which a lot of people lose a lot of money. It ends up pear-shaped for most investors but there is a way to play it. You just have to love gambling and hope for the best while you time your every single move. If you get it right, you could fill up a large portion of your pockets. Get it wrong however, and the fall could be quite painful. A particularly nasty pump from the last couple of months turned out to be the one for Petrosonic Energy Inc (OTCMKTS:PSON).

Just like every other campaign, there were those people who blindly trusted the promoters and were buying as much stock as possible hoping that it would be worth its weight in gold one day and there were also the day traders who were well aware of what was going on and were simply following the ticker closely contemplating on the timing of the sale. The whole campaign was quite big. The total budget amounted to $3 million and famous Fox Commentator, Mr. Tobin Smith was employed to write a few words of encouragement for people who were considering a potential PSON investment. His optimism, was subsequently printed on paper brochures, pasted onto emails and sent out to numerous physical and virtual inboxes where they were opened and read by a large number of investors. Things were going along pretty much as expected – the ticker reached its first peak in April which was followed by a crash. It was in the process of recovering throughout most of May and June was shaping interesting and action packed.

It was, but not in the way most people expected. On June 18 an article went out which exposed the fact that the advertisement campaign carried out by Mr. Tobin Smith was actually a paid one (apparently most of the people who read through his promises and rather far-fetched price targets weren’t bothered to check out the fine print) and that unleashed a flurry of selling. The session ended with 22% in losses, Mr. Smith was fired from his position at Fox News and the slide continued for a few more days. Some newsletters tried to tout the ticker once again, quoting it to be “Tobin Smith’s Top Oil Tech Pick” (probably hoping that some investors might have missed the scandal) and while that did cause a green session or two, generally speaking, traders were having none of it. Until July 10, that is.

There was another email from The Stock Junction and it also featured Tobin Smith’s name, but despite this fact, the ticker set off on a steady ascend. PSON is still a long way off Mr. Smith’s price target but it did manage to climb up from around $0.65 per share all the way up to $0.82. Furthermore, there was only one red session during that period and even right now, about an hour after today’s opening bell, the ticker still seems to be performing rather well.

Reasons? Truth be told, having in mind all the things that happened to PSON during the last couple of months, we’re struggling to think of anything that could lure you into thinking that this is a safe place for your money, but it would seem that The Stock Junction’s email did the trick for some of the people. We’ve already discussed how overly optimistic the things written in it are, but the alert wasn’t the only new thing around PSON. They issued a press release last Monday which probably helped push the ticker up as well.

66PSON_logo.gifAccording to the announcement, they signed a Memorandum of Understanding, which will later morph into a Sales, Distribution and License Agreement with a company called East West Partners LLC. Mr. Art Agolli, PSON‘s CEO, said that this is an important step in the commercialization of the technology and revenue generation and that’s where we got really confused.

In another optimistic press release dated June 10, Mr. Agolli stated that they have already started generating revenues from the brand new emulsification plant in Albania and right now, he’s saying that they are still taking steps towards the first proceeds. We don’t know which of the two announcements is closer to the truth and we probably won’t find out until the next quarterly report. In the meantime we also don’t understand why there seems to be no information about the other side in the new MOU (East West Partners, LLC) available on the vast open spaces of the Internet.

In any case, whatever the answers to these questions are, you should definitely be aware of the risks of a potential PSON investment. A lot of people who weren’t got seriously burned during the drop in June and those who tried to play the pumps for NanoTech Entertainment, Inc. (OTCMKTS:NTEK) and Arch Therapeutics Inc (OTCBB:ARTH) are probably still licking their wounds, as well.

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