Biostem U.S. Corp. (OTCMKTS:HAIR) Climbs Despite ‘Buyer Beware’ Symbol
Yesterday Biostem U.S. Corp. (OTCMKTS:HAIR) surged on zero news and press releases, as well as no detectable ongoing stock pump campaign. There were more than 1 million HAIR shares changing hands yesterday and the stock gained over 70% in the session. Obviously, traders were undisturbed by the fact that the company has a ‘Buyer beware’ skull and crossbones on its OTCMarkets page.
HAIR is a company that claims to be engaged in hair regrowth using stem cells. It also happens to be a pink sheet enterprise, currently tiered into Pink Limited Information due to a delay in public filings, as their latest financial report covers the quarter that ended November 2012. This in turn means that investors have information about the financial situation of HAIR that is over six months old. Here is what a brief look at HAIR‘s financials as of that date reveals:
- $148 in cash, $4 thousand in total assets
- $760 thousand in current liabilities
- $4 thousand in quarterly revenue
- $579 thousand in quarterly net loss
If those figures, both dismal and outdated, are not enough of a red flag, maybe the goings-on over at HAIR in early 2013 will be. On February 22 this year HAIR filed an 8-K announcing the departure of now-former CEO Dwight Brunoehler. Mr. Brunoehler had to leave his position at the company because he was arrested by the FBI on February 13 and was among the eight other arrested defendants in an indictment for fraud and market manipulation that dragged down 20 thousand investors and churned $30 million in illegal profits. Curious readers may find out more about the case in the official press release of the Los Angeles division of the FBI on the website of the Bureau – about as reliable as a source can be.
We would really like to believe that the company has turned a new leaf after this rather unpleasant incident and is now looking to build a normal business but the ‘Buyer beware’ sign on OTCMarkets, the information blackout and lack of current filings and the shortage of meaningful press releases on part of HAIR make it really hard to do that.
Investors are advised to be extra careful and do their own research before putting their hard-earned money in any stock.
