The Pump for Pingify International Inc (OTCBB:PGFY) Crash-Lands

PGFY.png$6.5 million is a huge amount of money even in the penny stock promotional world. This is the exact amount that Stock Tips received for pumping Pingify International Inc (OTCBB:PGFY).

With that sort of budget, you’d expect the campaign to be pretty effective at giving the price a boost and indeed, during the first couple of days, it was. Stock Tips officially announced PGFY as their new pick on Friday which, in turn, sent the stock on a huge run. The price on May 1 stood at under $0.30, but by Monday, it had already reached a staggering $1.37 per share. The only thing more explosive than the performance was the volume. The first session of the week, for example, ended with a mind-blowing $30 million in trade value.

Unfortunately, something went terribly wrong yesterday. Nearly 10.5 million shares changed hands resulting in a dollar volume of around $9.6 million. PGFY wiped out a whopping 41% of its market cap and closed the day at just over $0.80 per share. So, what caused the massive drop?

It’s fair to say that PGFY was a ticking time bomb from the very beginning. As usual, Mike Statler, Stock Tips’ Co-Editor (who, according to the disclaimer, is a fictional character) has put together a video in which he explains how huge the opportunities presented by PGFY are. In reality, the company is in a bit of a financial pickle. The 10-K for the period ended January 31, for example, paints the following picture:

  • total assets: $2,209
  • total liabilities: $62 thousand
  • no revenue since inception
  • yearly net loss: $101 thousand

Even if you disregard the poor financials, you’ll see on page 3 of the report that in January 2013, the company sold a total of 25 million shares at just $0.005 a piece. As you probably know, discounted stock and expensive promotions don’t mix too well.

All in all, like Stock Tips’ previous picks, PGFY was bound to lose a huge chunk of its value, but unlike Well Power Inc (OTCMKTS:WPWR), Tiger Oil and Energy Inc (OTCMKTS:TGRO), and Pan Global Corp (OTCMKTS:PGLO), it did it in a much more violent manner.

The reason for this is a press release issued by the company after the closing bell on Monday. The management team said that the British Columbia Securities Commission has informed them about the huge awareness campaign and pointed out that they have nothing to do with it. The people behind the company basically suggested that something might be wrong with the price movement and not surprisingly, this affected the performance. Despite the colossal drop, some people still think that PGFY could be in for a bounce.

PGFY_logo.pngThis seems unlikely at the moment. At 12:30AM today, Vlad Milutin, PGFY‘s CFO and Director, announced his resignation from the company. He said that he just can’t stand the losses that “thousands of investors” are subjected to, suggested that “one or more purchasers of S-1 shares @$.005” (the ones we mentioned above) are behind the whole thing, and urged the regulatory organs to investigate the campaign.

Sure enough, the company profile now boasts a Caveat Emptor badge and a lot of people reckon that some more serious actions are about to be taken against the stock. Will that happen? We’re about to find out. One thing is for sure though, PGFY is one of the most risky tickers out there at the moment. Treading extremely carefully and considering all the dangers before putting any money on the line is absolutely essential.

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