SNWR – Pump And Dump Alert – December 20, 2013
Welcome to Pump and Dump Friday, our weekly feature where we identify potentially “bogus” promotions going on in penny stocks.
Today we’re exposing one of the most extensive penny stock pump and dump campaigns of the week: Sanwire (OTCQB: SNWR).
If you don’t know how these schemes work, be sure to check out our free report that exposes the whole thing.
Without further ado, here is today’s disaster waiting to happen:
Sanwire (OTCQB: SNWR)
SNWR is one of the most heavily hyped penny stocks of the past week. According to our sources, 11 promoters have been paid over $55,000 this month to pump the stock through nearly 41 newsletters.
But it looks like the sellers couldn’t even wait for the pump kick in before dumping their shares on the market.
As you can see, the stock popped on December 2nd – the day promotional emails went out – but it has moved sharply lower since then. After hitting a high of $0.15, SNWR has plunged to just $0.02 per share.
That’s an 87% loss of value in just 15 trading days.
Sanwire bears several traits typically associated with pump and dump stocks.
First off, the company has changed its name and its business several times. It was originally called Clear Water Mining then E-Casino Gaming, E-Vegas.com, 1st Genx.com, Oasis Information Systems, 777 Sports Entertainment, and NT Mining.
And in March of 2013, the company adopted its current moniker.
After stints in mining, online gaming, and internet gaming software from 1997 to 2007, Sanwire decided to change its business focus back to mining exploration and development in 2008. However, that decision didn’t change the company’s financial performance as it continued to produce no revenue and rack up hefty annual losses.
And now this year, the company’s focus has changed once again.
After acquiring Aeronetworks in May, Sanwire is now focusing on selling that company’s iP Mine communication and mine safety system. This product is a real-time 2-way wireless and/or wireline communications and mine safety solution for mining and industrial companies.
Another red flag is that the company has had dismal financial performance for 16 years running. From 1997 through December 31, 2012, the company failed to generate a single penny of revenue while racking up a whopping $10.8 million in net losses.
However, with Aeronetworks now in the fold, management claims it has the ability to “expedite immediate revenue growth.”
And so far, it appears the company is delivering on that promise. For the first nine months of 2013, Sanwire reported revenue of nearly $255,000 and a gross profit of just over $17,000 – all from Aeronetworks.
With that said, the company is still losing money at a rapid pace.
Over that same time period, Sanwire spent more than $11.5 million on operating expenses. Most of that was due to a $9.9 million write-down of the iPMine technology “due to uncertainty of expected future cash flows.”
What’s more, the company reported a stunning $12 million net loss for the first nine months of 2013 compared to a loss of $573,012 in the comparable period of 2012.
When all’s said and done, Sanwire is still digging itself out of a deep hole.
The company has a working capital deficit of over $2 million and an accumulated deficit of $22.8 million since inception. As the company states in its latest quarterly report, these factors “raise substantial doubt regarding the Company’s ability to continue as a going concern.”
And finally, like we see with most pump and dump stocks, Sanwire’s solution to its financial problems is to do what it does best… sell more stock.
In September (just prior to the stock promotion campaign), the company announced a brand new “equity financing program.” Through this program, Sanwire has the ability to issue and sell up to $7.5 million worth of stock over the next three years.
In other words, instead of borrowing money from a bank or securing investment from venture capitalists, Sanwire will look to finance its latest reincarnation on the backs of retail investors.
Bottom line…
Given the company’s long history of failure, I don’t understand how anyone would risk their hard earned money on such an enterprise. My advice is to look for penny stocks with stronger financials and a management team with a better track record of success.
Other Penny Stocks Being Pumped This Week
Paradigm Resource Management (OTCQB: PRDC) – 19 promoters with 73 newsletters have been paid more than $100,000 this month to hype PRDC.
Avatar Ventures (OTCPINK: ATAR) – 15 promoters with 51 newsletters have been paid over $55,000 in December to plug ATAR.
As you know, penny stocks are a great place to invest your money. You just have to do your due diligence to stay away from all the schemes and scams out there these days!
Profitably Yours,
Robert Morris
Category: Pump & Dump Alerts
