Pervasip Corp (OTCMKTS:PVSP) Sputters to a Halt and Drops
A week ago, Pervasip Corp (OTCMKTS:PVSP) announced that they have acquired Plaid Canary Corporation. Yesterday, they said that the parent company is going to merge into the new subsidiary and that all PVSP shares will be converted into Plaid Canary shares. That is a big announcement, but how did the stock react to it?
It crashed and wiped out a quarter of its value. After 171 million shares changed hands in a matter of six and a half hours, PVSP stopped at exactly $0.0015 per share on a dollar volume of just over $250 thousand. Apparently, investors are a bit apprehensive about the merger announcement. Or are they?
Well, there are plenty of people around the message boards who will tell you that yesterday’s crash has nothing to do with the press release, or, for that matter, with the market sentiment towards PVSP as a whole. These people don’t reckon that the expired domain on PVSP‘s website is a problem.
They also find nothing wrong with the fact that Plain Canary Corporation doesn’t have any internet presence whatsoever. If you look really hard, you might be able to find the contest for Plaid Canary’s corporate logo, but that’s about the only thing you can uncover outside PVSP‘s press releases. Needless to say, the financials of the new subsidiary are still not out, either.
The company’s supporters don’t seem to be bothered about PVSP‘s dreadful-looking 10-Q which shows that at the end of February, the company had just over $2 thousand in the bank and a working capital deficit of around $12 million.
The people from the message boards are also undeterred by the outstanding notes at the end of February which were convertible into common stock at a hefty discount. Speaking of which, they also seem to think that issuing billions of shares at less than $0.0001 apiece isn’t such a big deal. And they don’t reckon that Kevin Kreisler’s involvement with PVSP and his past experience with penny stock companies (we talked about them a couple of days ago) isn’t really an issue at all.
The people from the message boards will tell you that neither of the above-mentioned problems has played a role in yesterday’s crash. They will say (with an exuberant use of capital letters) that the drop is the result of short sellers’ efforts to manipulate the stock.
Here comes the most important question: Should you trust them?
That, as always, is up to you to decide. We still reckon, however, that the red flags discussed above and the ones listed in our previous articles should not be ignored.
About twenty minutes after the opening bell, PVSP is sitting at $0.0013 – a further 13% in the red.