Arch Therapeutics Inc (OTCBB:ARTH) – The Aftermath
It’s been ten woeful days since the landing page for Arch Therapeutics Inc (OTCBB:ARTH) went online. During that time the pumpers have gave it their best to put the ticker on the map. And they did it… briefly. The run was so short that everyone was caught off-guard.
The long-awaited arrival of the research report written by Ian Cooper did have its effect on July 8 when the trading was absolutely frantic. More than 7 million ARTH shares changed hands and the price smashed through the $1 mark as if it wasn’t there, making the run from $0.91 all the way up to $1.24 in just six and a half hours of trading. After the massacre from yesterday, the ticker closed at $0.55 and right now, about an hour into today’s trading session, it’s another 10% down.
That sort of performance wasn’t expected. After all, it’s not like the pumpers didn’t make an effort. The landing page that we talked extensively about was full of optimism, it had rather ridiculous price targets for ARTH and it even claimed that the common bandage is obsolete. The promoters also employed Providence Media Strategies Ltd. operated The Paragon Report, Five Star Equity and The Bedford Report as well as a few less influential newsletters. At one point there were even some colorful brochures distributed over the postal services.
And it wasn’t cheap. When the landing page went live the disclaimer said that the total budget amounts to no less than $790 thousand. The hard mailer, which arrived in traders’ post boxes a day later said in an irritatingly fine print that the third party has shed nearly $3 million for the campaign. We don’t know which figure is the most credible, but having in mind that pumps with brochures being distributed over the snail mail are usually quite expensive, we’re ready to bet that the hard mailer is probably closer to the truth. The newsletters alone received a total of $240,500 and when you have such a huge campaign, you expect that the ticker will perform for a little bit longer.
It wasn’t to be and there could be a couple of reasons for this. The first of which is the recent actions that the regulatory organs have been taking against promoted penny stocks. In a matter of just a few months, four pumped small cap ventures met the anger of SEC and FINRA. Eco Trade Corp (OTCMKTS:BOPT) got halted by FINRA back in April; Polar Petroleum Corp (OTCMKTS:POLR) received the same treatment at the beginning of June; Norstra Energy Inc (OTCMKTS:NORX) was next and their order went out on June 26 and finally, the SEC decided to step in on the Biozoom Inc (OTCMKTS:BIZM) fiasco whose shares got halted on July 9. The motives for the temporary orders of these ventures were all different and we never saw the SEC or FINRA stating in plain words that they’re being pumped, but the fact remains that there were some massive awareness campaigns at the time of the suspensions.
Having seen that, the people who paid for the ARTH pump probably decided that they should act quickly before the regulators’ wrath descends upon yet another ticker and that’s probably why they decided to make the profits as soon as possible, avoiding an embarrassing end to the whole campaign. Of course, this is just a suggestion and we can’t really be sure that this is exactly what happened, but since we started speculating, we might as well draw one more scenario.
The whole pump seemed like a flop from the very beginning. Ever since we first wrote about ARHT on June 20, we suspected that there might be a promotion coming in. There were a few things to suggest that: ARTH‘s Chairman of the Board is also at the helm of Stevia First Corp (OTCMKTS:STVF) and OncoSec Medical Inc (OTCMKTS:ONCS) – two companies that have been pumped in the past with some catastrophic results; the name, the business and the ticker was changed along with the almost obligatory (when speaking about promoted penny stocks) stock split and increased authorized capital. Everything was pointing to the direction of a rather big campaign and when we found that the domain for the landing page had been registered, there was no doubt in our mind. The word spread around quite quickly and by the time the campaign actually started almost everybody was aware of what was going on.
“Almost” is a crucial word since although it was quite short-lived, the pump did manage to burn a gaping hole in the pockets of quite a lot of investors. And this really goes to show that no matter how big or small the promotion is, it could always snap and bite you, leaving you wondering what might have been.
Currently, companies like Rising India Inc (OTCMKTS:RSII), NanoTech Entertainment, Inc. (OTCMKTS:NTEK) and Premier Brands, Inc. f/k/a Tracksoft Systems Inc (OTCMKTS:BRND) are firmly in the pumpers’ sights and we would advise you that you consider all the risks carefully before investing in any of these tickers.
