Pumpers Go Silent, Urban Barns Foods, Inc. (PINK:URBF) Goes Down a Notch
Yesterday Urban Barns Foods, Inc. (PINK:URBF) closed 9% down, at $0.0795 per share. The slip came just as various pumpers who touted the company over the previous couple of days went silent and stopped sending subscribers their promotional emails.
Urban Barns Foods, Inc. is a penny stock company whose claim to fame is their patent-pending technology that aims to produce leafy greens locally and skip the shipping time from the farms to the supermarket. The company was targeted by several promoters who touted URBF stock, starting their latest round of emails this weekend. Among them was also pumper Awesome Stocks, whose last email came through on Monday. The compensation for the promoter amounts to a solid $30 thousand.
The promoters were completely silent yesterday when the company’s abrupt rise in share price was cut short. The chart movement of URBF was a mirror image of their previous day, with a gap up and a gradual falloff later in the session. Investors are probably hoping the pattern will not repeat in another session as that would bring the stock down to or even below pre-promotional levels.
URBF is a startup company that has not generated any revenue so far and is hoping it would do that when it launches its Cubic Farming facilities, the launch scheduled for tomorrow. According to the most current financial report from them, they had the following as of October, 2012:
- $239 thousand in cash
- $308 thousand in liabilities
- $126 thousand quarterly net loss
- ZERO revenue since inception in 2010
Even though the company “aims to be the supplier of choice” for urban customers, it doesn’t look like they are close to accomplishing that goal. Over the quarter ending October 2012 alone, URBF issued over 80 million shares as payment for services rendered, including such by company directors, as convertible note clearance and for proceeds. Issuing such amounts inevitably leads to dilution for retail shareholders.
Promoter Awesome Stocks have been around for a while and have advertised other penny stocks. The aftermath of their previous promotions is less than exciting. One example is their autumn pump run on Liberty Gold Corp. (OTC:LBGO) that came to an end on September 6. In the wake of the pump the stock dropped dramatically and is currently trading about 75% down from the peak of the pump.
Traders should always check all available information on any company and be extra careful with penny stocks targeted by paid pumps as those are the best candidates for a drop once the pumping is over and the company is left on its own.
