I have often been told that mistakes are among the most effective ways to learn. Still, some people just don’t seem to ever learn; they repeat the same mistake over and over again.
It had been a while since Awesome Penny Stocks (APS) had done a pump. Supposedly yesterday APS picked Vision Plasma Systems, Inc. (PINK:VLNX). As a result, the previously dead stock closed up about 200% trading 308 million shares, which is really strange, but we will get to that later.
We didn’t get an email from APS which is why we can’t say if this was really an APS pump, but the huge volume and spike in price are more or less in line with what APS has achieved in the past.
For those may be new to the Pink market and pump campaigns, APS has been the main pumper behind most of the ugliest pumps, resulting in the biggest losses. Probably the most easily distinguished characteristic of an APS pump is that the touted stock doesn’t crash in the first day of the promotion.
That, in no way, means that the stocks APS promotes are safe or even reasonable investments. APS started pumping NSRS at the beginning of the year. They managed to pump it up to $1.7 before the dumping started in February. Six months later NSRS is now NSRSE because its delinquent in its filing duties, and it’s trading around $0.02 99% down.
The one before NSRS was AMWI. The story there isn’t much different. People who bought in and thought it was not just a pump and dump scheme lost millions.
Taking a look at the current pick one can’t help but notice that it’s a small Pink Sheets company with about $375 thousand total assets and no cash whatsoever.
After the close yesterday, NVLX issued a press release claiming there is a signed agreement with a Japanese company for the purchase of two Arc Master I Units for $5.8 million each.
The company hasn’t announced any financing, so how they could even manufacture those units is a bit of a mystery. Back in June NVLX supposedly met with a representative of the Brazilian government to discuss the production of the aforementioned units, however there have been no updates on that matter.
Getting back to the 308 million shares traded yesterday, the suspicious thing is that the number of outstanding shares according to the reports of NVLX is 375.1 million and the public float is supposed to be 100 million shares; if that’s true it would mean that the whole float of NVLX was traded several times. A volume of that proportion can alternatively be explained by dilution, which hasn’t been reported to the public.
At $0.30 per share that’s about $3 million spent on trading VLNX shares. All that on the stock of a company which either has no cash and has limited assets, or a company which isn’t making materially significant information public.
Traders should also keep in mind that the announcement wasn’t made before the close, so the approximately $3 million came on nothing but a pump.
Traders will be well-advised to be extremely careful with this company, unless they want to learn the hard way.
