Bottom Falls Off for Psychic Friends Network, Inc. (OTC:PFNI)

If Psychic Friends Network, Inc. (OTC:PFNI) promised an ever-climbing investment, it may have misread the future. In the midst of a promotional campaign, its stock fell more than 50% on sudden, low-volume profit-taking. It seems the paid emails have stopped a few days ago and PFNI cannot rely on the promise of a profitable psychic advice business.

The campaign had a budget of $200,000, and promised to go on for a while, but since the end of last week the messages from paid pumpers stopped, as well as the PR campaign of the company on well-respected news websites. In such cases, we often expect the sharp correction to continue in the next few days, although the stock has already returned to the price before the pump.

Although the desire to seek psychic explanations is widespread and there is always a market for such services, it seems PFNI is still not offering real business, is registered as a development-stage company and may only offer a risky and choppy stock ride.

Currently, the Psychic Friends Network struggles for attention and success with the following financial strengths and weaknesses:

• Zero revenues

• $394,063 cash

• $168,043 quarterly net loss

• $35 million market capitalization

Even with a new website, the revived company has an unclear future, which hinges on the plans of its CEO Michael Lasky. A serial entrepreneur, he is known for abandoning companies and moving on to new projects. While Psychic Friends Network is a strong brand and may not be left in the cold, it still has not copied its success and revenues from the 90s.

It remains to be seen if the campaign for PFNI will continue in any form. One of its main promoters, Stock Specialists, has a past history of pumps with a relatively high compensation of $100,000 on average. One of its previous picks was Santo Mining Corporation (OTC:SANP), a much-hyped company in the past weeks. As we predicted, its stock remains 60% down from the time of its promotions. With companies promising future development, it’s best to estimate the risk before believing their hype.