You’ve seen my posts calling SPNG a pump & dump HERE and HERE and students of my PennyStocking instructional DVDs, specifically my TIMfundamentals DVD package, in which I explain my research process in a 6-hour 4-disc DVD package (with huuuuge instruction manual & 30-day satisfaction guarantee), know EXACTLY why but for you lazy/gullible suckers out there, the following is why I shorted 10,000 shares at 18ish cents/share late Friday (Over a dozen TIMalert subscribers are short at 18, 21, 23, 24, 26 and 27 cents/share, some of whom covered as low as 8 cents/share on the predictable intraday drop…yup, that pattern is not unique to SPNG, it’s happened about 1,000 times in the past few years and I’ve made several million dollars trading these pump & dumps, that’s why I teach from experience)
Here are the facts:
Revenues and profits sound like they’re increasing nicely and you’re encouraged by all the company’s marketing efforts, but the company’s management are all known stock promoters and they’re feeding you exactly what you want to see in order to pump their stock price so they can dump shares on you….this is not the first pump & dump, it’s definitely not the last, you can learn how the game actually works (I mention my study materials over and over because I’ve made millions over the past decade (yes, don’t let my small demo account fool you, I’ve made over $3 million playing this EXACT kind of pattern, see my bio HERE)
Download a PDF version of this post.
In short, I don’t believe a word SPNG says about their business, the new orders might be real or not, but I wouldn’t be surprised to see them selling these sponges at a loss just to get the headline #s up (it’s not about the porudct guys, the promoters just need a story to sell to get the stock up)…they’re friggin stock promoters, they could claim their working on a new sponge that when used enough will help you fly…probly schedule for August release! That’s how ridiculous their claims are, you can NEVER trust a word any stock promoter says because their entire business is information manipulation.
Get ready for a whirlwind tour of what actually matters in penny stocks, it ain’t revenues and profits down here in the gutter, it’s supply & demand of shares! (Suckers and manipulators would liek you to believe otherwise, but their HORRIFIC track records speak for themselves (not to say it’s not a good idea to buy pumps, I made my first million buying, now I mainly profit from the short side since it’s more workable/ethical/teachable)
SPNG is the single greatest penny stock issuer of shares because stock promoters are in charge so they’re like the US government printing $, except they don’t have anything backing them up, they just have PRs, positive articles they paid for and a bunch of suckers running around believing their scheme.
Take for example on June 5, 2008, when CEO Michael Metter said:
With our balance sheet and cash positions, we have greatly improved due to the increased sales of our products. We do not expect to have any dilutive financing in the near future.
Lots of other positive BS in that article and ALL their other press releases, read the comedy if you want, but be sure to read the disclaimer:
TGR Group, LLC has been paid a fee of $30,000 cash and 750,000 shares of newly issued restricted stock by Spongetech Delivery Systems Inc. for coverage of the Company. Additionally, one of the managing Members of TGR Group, LLC has purchased 150,000 shares of Spongetech Delivery Systems, Inc. in the open market with an average cost basis of $.035 cents per share.
Now why would a publicly traded company pay piece of crap websites with a email lists so much cash and stock if their product was really that good and they were secure in their financing? After all, this is a company with hardly any cash or working capital:
As of February 28, 2009, we had cash in the amount of $34,570 as compared to $19,387 at May 31, 2008.
More importantly, why would Metter turn right around and contradict himself just a few months later by issuing 700 million+ shares to himself for a few million dollars?
Taken straight from the SEC filings (which suckers don’t even know how to read/check):
During the three months period ended November 30, 2008, the Company issued an aggregate of 409,953,442 shares of common stock to RM Enterprises International, Inc., a related party, in consideration for the conversion of an aggregate of $6,319,569 in debt or an average of $0.015per share.
During the three months period ended February 28, 2009, the Company issued an aggregate of 306,412,290 shares of common stock to RM Enterprises International, Inc., a related party, in consideration for the conversion of an aggregate of $1,188,970 in debt or an average of $0.0039 per share.
Yup, you read that correctly, this tiny company went from just over 100 million shares outstanding (already a lot to over 700 million shares outstanding) and management issued shares to themselves at a 40% discount to the market!
There were so many shares issued the board even had to approve a special corporate allowance to issue so many shares in the first place:
Effective October 8, 2008, the Board of Directors of the Company amended the Company’s Certificate of Incorporation to increase its authorized capital to 1,000,000,000 shares consisting of 950,000,000 shares of common stock, par value $0.001, 40,000,000 shares of preferred stock, par value $0.001, and 10,000,000 shares of Class B Stock, par value $0.001. The Class B Stock is a newly created designation.
And it looks like more dilution/looting is on the way considering they had to up one billion allowed shares to 1.3 billion!!!
But just a few months later, they needed more room to issue more shares:
Effective December 12, 2008, the Board of Directors of the Company amended the Company’s Certificate of Incorporation to increase its authorized capital to 1,305,000,000 shares consisting of 1,250,000,000 shares of common stock, par value $0.001, 40,000,000 shares of preferred stock, par value $0.001, and 15,000,000 shares of Class B Stock, par value $0.001.
Oh wait, but they weren’t done just yet:
On March 9, 2009, our Board of Directors and shareholders holding a majority of the outstanding voting stock of the Company approved a resolution to amend our certificate of incorporation to increase our authorized capital to 1,555,000,000 shares, of which 1,500,000,000 was common stock, 15,000,000 was Class B stock, and 40,000,000 was Preferred stock. We maintained our current authorized 40,000,000 shares of preferred stock and 10,000,000 shares of Class B stock.
And ya know, the potential to have 1.55 billion shares, a 1500% increase since last year, just isn’t enough, so they did one more hike to 1.86 billion one month later!
Also, on April10, 2009, our Board of Directors and shareholders holding a majority of the outstanding voting stock of the Company approved a resolution to amend our certificate of incorporation to increase our authorized capital to 1,860,000,000 shares, of which 1,800,000,000 was common stock, 20,000,000 was Class B stock, and 40,000,000 was Preferred stock. We maintained our current authorized 40,000,000 shares of preferred stock and 10,000,000 shares of Class B stock.
Too funny. Silly stock promoter wannabe management, don’t they know that kind of excessive dilution is toxic to share price?
Of course they know! To cover up this personal looting, they issued a buyback program and had press releases saying it was illegal shorts who were driving down the price (aka enrich themselves & trick shareholders by creating a fictitious enemy all while buying back
The Company initiated a share repurchase program on September 5, 2008. As of the date of this report, we repurchased 3,265,050 shares of our common stock which shares have been returned to treasury and cancelled.
LOL, issue hundreds of millions of shares, don’t have ANY PRs about that and then buy back 3 million shares (they haven’t bought a single share in 2009, this is when the pump & dump happens!) and promote the heck outta of it. Good one guys!
So while they can say whatever they want in PRs & attract idiot investors through sports sponsorships, the SEC filings tell the sad state of affairs.
Oh yeah, and there’s the management’s/investor’s shady pasts…ALL involving defunct corporations, companies that change their name to hide the stench from their pasts and other manipulated or dead-on-arrival OTCB penny stocks (none have ever made it to the more highly regulated NASDAQ), check out their backgrounds HERE and HERE, below are the charts:
After this pump and dump is over, it’s INEVITABLE that SPNG will end up below 5 cents/share. Pipedreams of $1/share have been placed into your ignorant little heads, the reason why it trades so much is due to all the shares management and stock promoters have thrown out onto the market.
Time to grow up kids and learn how the game is played…or your account will suffer. This is your wakeup call, allegory of the cave-style.
Most of you suckers won’t even realize until it’s too late (despite the drop, it’s still waaaay inflated, bound to come down as management plunders you with all the shares they approve and which they bought at 40%+ discounts to pre-inflated prices)
To the pumpers/manipulators, great work, you really have a TON of people fooled…if I ever ran a fraud, I’d want you–and Jim Blackman–to be my PR wingmen…too bad my soul is intact, I know you’re making millions, but how do you sleep at night?
To summarize, all those positive articles, and there are hundreds, have been written BY STOCK PROMOTERS & INSIDERS PAID TO BE POSITIVE ABOUT SPNG. Check out some disclaimers and see exactly how much cash and free-trading shares are being thrown around:
OTCPicks.com has been compensated two hundred thousand free trading shares by a third party (Pine Mountain Ventures) for this current SPNG IR program. OTCPicks.com has been compensated in the past for SPNG IR services including seventeen thousand dollars by the company and four hundred thousand free trading shares by a non-controlling third party for multiple 30-day SPNG IR programs
Think about it, if you were paid 200,000 shares from some shareholder, $17,000 by the company itself and then another 400,000 shares form some other shareholder, you’d want to get the stock up so you could dump it and cash in your chips, right?
Of course you would, that’s how pump and dumps work and that’s why the company needs to issue so many shares–so they can sell some for themselves as the promoters they paid get the stock price up and why after the pump comes the dump,which began Friday and won’t be over until every last share is sold at whatever prices they can get!!!!
All moral, rational, justice-seeking, short sellers, experienced market players and law abiding citizens please reblog this post, retweet it, get the word out about this situation to help those too poor, dumb and inexperienced to understand what’s actually going on…thanks!