Saturday, August 18, 2012

The Mystery Behind the Rise and Fall of Vision Plasma Systems Inc (VLNX)

VISION PLASMA SYSTEMS INC (PINK:VLNX)’s stock tanked on Friday after a spectacular rally on Thursday that saw record volumes of shares being traded.

Was it a penny stock scam? Or were investors genuinely caught on the wrong foot? Investors are certainly mystified by it, especially those who got sucked in by the recommendations of certain `experts'.

On Thursday after the close of trade Vision Plasma announced that it had signed an agreement with Japan's Cell Runner Inc. for the sale of two Arc Master I Units.

These initial units would be used to remediate over 5,000 hazmat suits used daily by clean-up crews working in the Fukushima Nuclear Facility, at a cost of $5.8 million per unit.

However even before this news was released shares of Vision Plasma soared a whopping 270 percent, tripling in a single day with 308 million shares being traded.

Get Complete Analysis on VLNX Now Here

Both Penny Pic and Awesome Penny Stocks had actively recommended the company's shares, luring free subscribers to pay $150 a month so that they would be privy to advance information.

Within minutes of the pick being released to subscribers the stock had already gone above $0.26, but the buyers still came in. The stock made a new high of $0.39 in intra-day trades.

The next day, Friday, the stock opened well below $0.26 and as rapid as the rise had been on Thursday, the fall was as quick with 74 percent of its value being wiped out during the day. However, the stock was up 236% in after-hours on Friday.

The popular notion is that some insiders knew about the deal to be signed on Thursday and acting on that `promoted' the stock assiduously among those investors who are looking for bargains.

With regard to the company's agreement with Cell Runner there were some reports that expressed their suspicions about it.

Hot Stocked said: "The company hasn't announced any financing, so how they could even manufacture those units is a bit of a mystery. Back in June VLNX supposedly met with a representative of the Brazilian government to discuss the production of the aforementioned units, however there have been no updates on that matter."

It also pointed out that "the number of outstanding shares according to the reports of VLNX is 375.1 million and the public float is supposed to be 100 million shares; if that's true it would mean that the whole float of VLNX was traded several times. A volume of that proportion can alternatively be explained by dilution, which hasn't been reported to the public."

Somebody has a lot of explaining to do.

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