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I have written a number of times about how UK websites you are meant to trust like MoneyAM and UK-Analyst (and now Digital Look has also trundled along the walk of shame) have been accepting money to send their loyal readers a promotion for US OTC stock Harmonic Energy (USOTC:ASUV) stating “This is the one stock you must buy now” and suggesting that gains of 3,200% are possible. In very small print on these promotions it is admitted that they are paid for by a shareholder who wants to sell shares. In other words this is a pump and dump operation. And in the latest SEC Filing of 14th December we discover that Harmonic has almost no cash, no revenues and is burning cash – it should be clean out of money within a couple of weeks. The auditors flag this as a going concern issue. Er…just a bit. At 95 cents today the company is valued at $59.9 million.
US Investors are happily dumping shares and guess which suckers are buying? Er… Yes Limeys it is you thanks to those mailings from websites you thought you trusted. Heck that is the special relationship in action, the yanks get to offload their shit on the Brits and we send them Piers Morgan in return. Unless you were one of the folks suckered this is almost funny.
That supposedly respectable UK websites take cash to pump out this crap is a total disgrace but the story of this mega stock promotion for a total nothing company gets funnier still as I am sent the latest release from Harmonic with blockbusting news. I quote:
Harmonic Energy’s – Tire Manufacturing & Pyrolysis Recycling News is Trending in Social Media Releases
Harmonic Energy Inc. (OTCQB: ASUV) (OTCBB: ASUV) is a company focused on tyre manufacturing and recycling, using an innovative approach to energy efficiency and sustainability. Harmonic is pleased to announce that it’s integrated social media campaign has made significant gains over the past few weeks and information about the company’s green tires and sustainable manufacturing process has been well received by the environmental products and consumer market place.
In 30 days since the announcement of the social media and product awareness campaign Harmonic has gone from having only 30 Twitter followers to over 100,000 followers, it’s YouTube Channel has had nearly 1000 views and likewise the company now boasts over 11,000 “Likes” on Facebook, now giving the company significantly more reach with both its investors and partners. Based on these numbers we believe that this reflects people’s growing interest in the company and its business model. In review and when compared to any of the major tire manufacturers Harmonic’s social media campaign in 30 days has gained more social interest than several manufacturers combined. “We are very proud that so many people in such short time have taken notice of our energy efficient tire recycling company”, commented Jamie Mann, CEO of Harmonic Energy Inc.
There then follows a lot of blather about how this company which as at October 31 had cash of $31,633, current liabilities of $37,633, revenues zilch and had burned cash of $24,813 ( all on admin and website costs) in the prior three months is set to compete with Michelin, Goodyear etc. With no new cash raised since, this company which is already technically insolvent really will be out of cash within weeks if not days.
But heck who cares about trivialities like zero revenues, trading while technically insolvent (from a shared service office “front “ address), pump and dump share promotions or impending cash extinction, the company has 100,000 followers on twitter and 11,000 “Likes on Facebook.” Ooooooh.
I could not resist checking out the company’s official twitter feed which includes such gems as
“For those investor that are short selling HE, you will get caught with your pants down, its just a matter of time ;) “
How very corporate. That one came out on 14th December the day of the SEC filing when the auditors said of this $60 million capitalised company with negative net working capital and no revenues:
“The Company currently has a working capital deficit, and has not completed its efforts to establish a stabilized source of revenues sufficient to cover operating costs over an extended period of time. Management anticipates that the Company will be dependent, for the near future, on additional investment capital to fund operating expenses The Company intends to position itself so that it may be able to raise additional funds through the capital markets. In light of management’s efforts, there are no assurances that the Company will be successful in this or any of its endeavors or become financially viable and continue as a going concern.
The 102,000 twitter followers are of course nearly all bots and assorted loons, I somehow doubt that many mutual fund managers are signing up for such hilarity. Oh hang on, is that not Warren Buffet among Harmonic’s twitter followers?
Silly me. Easy error. It is in fact @steviehinto “I’m a licensed Cosmetologist specializing in healthy, natural nail care. Follow me for tweets on nail care tips and promotions.” Heck, maybe Stevie does tyre recycling in his/her spare time? Or perhaps he/she is following Harmonic to hook up with @tanjatltt “Here to support a sexy Canadian guy, that taught me to Never Say never. GaGa is the Quen B*tch! Radiate SWAG~Put your PAWS Up.” Indeed tanjatltt, very interesting but what do you think about the economics of tyre recycling?
Maybe I am now just too old to understand all this new media stuff. Perhaps one should value companies based on how many complete morons/bots follow them on twitter and like them on Facebook and forget about fuddy duddy boring old metrics involving cash and sales.
You will excuse me while I attempt to start tweeting with @steviehinto about how I can touch up my toenails and his/her estimates of the DCF valuation of Harmonic.
Pro tem my valuation remains c$0 per share. Sell.
Tom Winnifrith writes for ten UK and US websites. You can get alerts on all his articles ( but no tips on nail care) by following him on twitter @tomwinnifrith – you can also register for a free bi-weekly newsletter from Tom, the Tomograph by clicking here
