Polar Petroleum Corp. (OTCBB:POLR) $700 Thousand Pump Still Running
Yesterday Polar Petroleum Corp. (OTCBB:POLR) landed the top 5 spot among the most heavily traded penny stocks despite its steep price of over $3 per share. The reason for this was the $700 thousand pump that is still going strong.
The onset of the pump can be discerned in the sudden accumulation of share volume that took place in the last days of April and increased in the first few days of this month. The promotion is conducted through a website page that hosts the body of a huge advertising material that contains many ludicrous touts and claims, including gains of nearly 2000% and comparisons between POLR and established huge NYSE and NASDAQ businesses, as well as a ridiculous price target of $20 for POLR stock.
The small email pumpers disclose insignificant compensations but their embedded disclaimers state that Pond Research LLC / Ken Williams’ Hard Asset Report received the sum of $700 thousand as compensation, paid by Commodity United Ltd. for the advertising campaign on POLR. The full advertisement formatted as a ‘research report’, together with its $700 thousand disclaimer, can be found at hardassetreport dot com.
POLR is an OTC-tier company that strives to make it in the oil sector. POLR‘s latest report is a quarterly for the period ended December 2012 and it contains the following:
- $125 thousand in cash
- $1.2 million in ‘oil and gas properties, unproved property’
- $1.1 million in liabilities
- zero revenues since inception
The company announced in a news release that it secured a line of equity financing in March, under which POLR can draw installments up to a total of $10 million. Sadly, the debt arising from those will be paid with company stock at a percentile discount – hardly good news to shareholders.
Considering someone paid $700 thousand to promote POLR stock, traders should keep in mind that there is no charity in the world of stocks and sooner or later the paying party will likely want to make up for the cash spent on advertising. This balance will quite likely be restored at the expense of people who bought the inflated shares during the promotion. The pump is built around future promises of millions of barrels of ‘recoverable’ oil and highly unlikely allusions to a ‘takeover war’ for POLR. Obviously the promoters believe the huge companies that work the surrounding properties didn’t have the resources to acquire POLR‘s claims before the company made its move and will now hurtle head-over-heels to acquire them from POLR.
Considering the high budget of the pump, this one may run for a while but the $700 thousand promo budget alone is a huge red flag for investors. The current price is steep enough for newly arriving penny lovers anyway but still, this should serve as a word of caution.
