Arch Therapeutics Inc (OTCBB:ARTH) With Another Green Session
The promotional campaign for Arch Therapeutics Inc (OTCBB:ARTH) started during the weekend and it’s shaping up to be a big hit in Pennyland. The total budget is an astonishing $2.9 million and an entity called Full Service Media are the ones taking care of the brochure and its distribution through the snail mail while Five Star Equities, Paragon Report and The Stock Junction are the ones keeping the flame burning on the email front.
The majority of bright promises and overly optimistic price targets come courtesy of Mr. Ian Cooper (who also received some cash for his predictions) and everyone’s mightily excited. The inexperienced investors who trust the rather far-fetched ideas around hard mailer brochures, landing pages and emails are convinced that by sticking with ARTH, they are going to raise the college fees for their children, while day traders who just want to play the pump are watching the price go up and constantly wonder how they can maximize the profits.
In that respect, yesterday was not that interesting for both groups. The volume was still pretty high and the ticker did finish the session around 5% above the previous close, but it was nothing compared to the trading frenzy we saw on Monday. Still, in just three days, ARTH has managed to increase its value by nearly 50% which means that moaning is not on the agenda. At least for now. The question is: “How long will the whole thing last?”.
It’s a bit hard to tell, but from what we have seen so far, we can predict that ARTH is probably not going to make it big time as Mr. Ian Cooper suggests. If you have a look at our previous articles, you will see that there are quite a few red flags hanging around the company such as ARTH‘s Chairman of the Board, Dr. Avtar Dhillon’s affiliations with other small cap ventures like Stevia First Corp (OTCMKTS:STVF) and OncoSec Medical Inc (OTCMKTS:ONCS). A quick check into the financials of the two companies reveals that neither of them has managed to generate even a dime in revenue since inception and we are struggling to see how it could be “third time lucky” for Dr. Dhillon. That’s why, if you are looking at ARTH as a long-term investment, we would suggest that you perform a lot of research and due diligence before making any moves.
But what about the rest of the traders interested in ARTH? What about the ones who simply want to play the pump and make quick and easy money? Well, some of them are hoping to see performance similar to the ones displayed by Cloud Security Corp (OTCBB:CLDS). Just like ARTH, the promoters employed a landing page as one of the primary tools used to pump the ticker and it worked brilliantly when CLDS reached their 52-week high of $1.47. Inevitably, the ticker crashed hard and it currently stands at around $0.30, but before it did, it provided quite a lot of opportunities for a profit.
Another scenario, of course is the classic one we’ve seen with paid promotions and the chart for Echo Automotive Inc (OTCBB:ECAU) (Paragon Report and Five Star Equities’ last pick) illustrates it perfectly – a brief spike followed by a huge crash. As you can see, once it fell down, the emails just couldn’t pick it off the ground and it continued to slide downwards bringing the total losses since the height of the pump to around 70%. Normally, these will be the two options, but in the recent months we’ve seen some pumps develop differently.
Before Ian Cooper took on ARTH, he was busy coming up with absurd price targets for another small cap company called Biologix Hair Inc (OTCMKTS:BLGX). The pump was a relatively small affair and it didn’t really have that much of an impact but there was a landing page amusingly called stockofthedecade dot com. Even though the volume was almost negligible, BLGX did manage to gain some ground and at one point it reached nearly $5 per share. Then, however, on June 26, a contributor on Seeking Alpha published an article in which he said that there’s basically no way in which BLGX can reach the optimistic price targets and this all resulted in a giant slide which hasn’t stopped to this day. We saw a similar thing with Northumberland Resources Inc (OTCMKTS:NHUR) on Monday and, having in mind all the excitement around ARTH, the consequences of a similar coverage could be even more catastrophic.
There is of course, the option of the regulators stepping in, as well. In the last couple of months we saw a total of four companies receive suspensions from either FINRA or the SEC. We’re speaking about Eco Trade Corp (OTCMKTS:BOPT), Polar Petroleum Corp (OTCMKTS:POLR), Biozoom Inc (OTCBB:BIZM) and Norstra Energy Inc (OTCMKTS:NORX). The reasons listed for the suspensions were different but what is common between all of ventures is that they were all under the pressure of promotions when they got halted. The four tickers are headed straight to the Grey Market, and the chances of coming back are next to none. Make sure you have all these things in mind before you make your next move on ARTH.
