Arch Therapeutics Inc (OTCBB:ARTH) Obliterating More Investments

Things are not going according to plan for Arch Therapeutics Inc (OTCBB:ARTH)’s pump. The campaign entered its second week yesterday and while we saw a massive 38% leap last Monday when the landing page was finally launched, there was just one green session after that and the amount added was less than 5%. Since then it’s all been downhill for the pumpers and yesterday, ARTH wiped out a further 30% which means that the people who bought in during the height on July 8 are currently looking at losses of around 45%. That’s a pretty poor performance especially considering the fact that the total promotional budget amounts to around $3 million.

We’ve seen other expensive promos and among the most recent examples are Northumberland Resources Inc (OTCMKTS:NHUR), Cloud Security Corp (OTCBB:CLDS) and Inscor Inc (OTCMKTS:IOGA) (who are maintaining a rather steady performance although nobody seems to be interested in them anymore). The thing in common among the pumps for NHUR, CLDS and IOGA is the fact that they all ran for quite a while so you’re probably wondering right now: “Why are ARTH‘s shares 45% below the height of the pump just a week after the whole thing started and is there any chance that they might regain some composure?”.

The whole thing started off on the wrong foot. Rumors about a paid pump were flying around long before the actual campaign started and the buying volume during the weeks before the launch of the landing page drew a lot of attention. When they saw that a lot of people are talking about it, the pumpers probably decided to postpone the campaign and that in turn got day traders and people who simply wanted to play the promotion rather impatient. When the landing page went online trading exploded but it would appear that it was way too much and within just two sessions, the ticker was out of steam. The question now is: “Is there anything that might get the whole campaign back on track?”.

Well, we’ve been around penny stocks for quite a while now and we know that in such cases, the only thing that could save the day is a press release from the company stating that something new and exciting has happened. When we saw the slide from the last couple of days, we were expecting this to happen and a new batch of emails from Paragon Report, Five Star Equities and The Bedford Report titled “Breaking News Today!” made it clear that a press release is being prepared. The news is not that “Breaking” but it does say that one of ARTH‘s co-founders, Dr. Rutledge Ellis-Behnke has appeared on a conference where he talked about Nanoparticles, Nanomaterials, Nanodevices and Nanosystems. Normally, this would be enough for the buying to commence once again, but as we already mentioned, ARTH‘s case is a little bit different.

The press release itself came online around 9AM today but a few minutes later, another article was published and since it’s on Seeking Alpha, it went straight to ARTH‘s Yahoo Finance profile. It’s called “Bandaging Wounds From Another Promoted Stock Scam”, it was written by a contributor called David Merkel and he speaks about ARTH‘s past business (online auto parts retailer) and about the pump itself. He first published the article on his own blog, but now that it’s on Seeking Alpha, it will probably get a lot more exposure and this could have an even more devastating effect on the stock.

A fresh example of how badly these sort of coverages affect the promoted tickers is none other than the aforementioned NHUR. The people who fell for the pump were already looking at some significant losses when another Seeking Alpha contributor called Brett Wilson wrote an equally revealing article on Northumberland and that meant that in a matter of just a week, the ticker has wiped out a further 58% of its value. The chart for Biologix Hair Inc (OTCMKTS:BLGX) provides yet another example. They were being touted by none other than Ian Cooper (whose optimism is plastered all over ARTH‘s landing page) and he called BLGX “the stock of the decade”. On June 26, however, a person called Christopher Drose exposed all the red flags resulting in 40% losses in less than three weeks. Whether this will happen to ARTH as well remains to be seen but we reckon that the risks are mounting by the second.