The Implosion Games (SNPK)

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Sunpeaks Ventures, Inc. (NASDAQOTCBB: SNPK.OB) is a company which might sound like it is a ski resort or some form of outdoor sporting outfit.  It is not.  The company’s stock has risen from under $0.50 to over $2.00 on the prospects of its Clotamin multivitamin product.  Now its shares are back at $0.56 and this is down a sharp 35% on the day as it appears that a hard case of reality has set in.

Clotamin is called a “specialized over-the-counter multivitamin product designed exclusively for use by patients also on the blood-thinner called Warfarin®” and it aims to help with the drug’s adverse drug and food interactions. In the world of OTC stocks, investors and momentum players rarely know what they are really getting with any certainty.  Most of these companies have limited financial backgrounds, limited operating histories, and often have inflated stories versus reality.  Is that the case with Sunpeaks?  Who knows, and for that matter who cares.  When you see a rally followed by a rapid cratering of this sort in a very short period of time it is obvious that there is a suitability issue that most investors should be avoiding.

Seeking Alpha pointed out the risks on Friday the 13th of all days this April showing a promotion outfit ran the stock up but how other promo-stocks have cratered in the past tied to the group.  When Seeking Alpha pointed out the risks the stock was at $1.80 and it ran up as high as $2.40 that next week.  The problem is that the same day there was the $2.40 print, the stock closed down at $0.93 on that day.  Shares tried to bounce but now the losses look severe.

Why does the term pump and dump come to mind here?  Maybe the company really is one of the exceptions, but we would again bring up suitability issues despite the millions of shares that trade each day.

Our hint here is simple.  By the time most investors find out about OTC stocks like this most of the money has already been made.  Please do not try to use a chart here for technical analysis looking for support and resistance even if the volume is millions upon millions shares per day.

This is what happens in penny stock heaven… or is it penny stock hell?