Hop-On Inc (HPNN)

[Arthur]

So what ?

PM cannot wake up a nice morning and decide "let's order 50,000 phones from Taiwan", and then sell them at a fat profit.
It doesn't work that way.

Tiny orders for a small run of "vanity" phones (and 50,000 is a small run) gets charged the full price, which make them uncompetitive with retail phones from, say, Nokia.

HPNN is no longer a phone OEM. They haven't sold a single phone in years.
Take for example in 2008. Hop-On announced they were "readying" an Android phone (Android was brand new and unknown then).

Hop-on readying Android phone
http://www.electronista.com/articles/08/10/24/hop.on.android.phone/

Technical details of the phone are unavailable, though Hop-on claims the phone will cost below $200 and should be launched at January's Consumer Electronics Show.

OK. Let's track their 2008 R&D expenses in their unaudited financials (filed in Nov 2010).
2008 R&D expenses: $0 (unless they're part of the $55K "administrative" expenses).
Now let's see their 2009 inventory purchases: Cost of Sales: $0
And Sales are $0 for the whole year too !
But he did make $3.7M from shares sales in 2008-2009, without selling a single phone.

There you have it: you have a CEO who announced one (actually, several) Android phones, posted nifty Photoshops of new phones models on its website, but didn't order, nor ship, a single one !

And now, he's doing it again.
Why not ? It will allow him to move 5 billion shares, for the cost of a $250 paid Press Release.
There is no downside. it's like printing money.
Just say you will sell phones, and they will give you their money.
Obviously, I'm in the wrong business.