Ecrypt Technologies Inc (OTCBB:ECRY), A Pump Run Out Of Fuel?
After a two-day pumping “spree” by StockTips and other pumpers riding its alleged $5.1 million compensation wave, Ecrypt Technologies Inc (OTCBB:ECRY) tripped on the peak of $0.36 and slid all the way down to $0.262 which is a 27.17% drop. Yesterday’s red session landed very close to last Friday’s opening price when the not so mysterious whopping gap of nearly 100% presented itself. Will they slide on and do some gap filling or can the pumped up hype rally on?
Well, I don’t think anyone could answer this question with a 100% certainty when it comes to OTC stocks. But in a preparation for today’s performance there are some interesting things to look at regarding yesterday’s trading session.
Firstly, a press release came out in the morning about the Microsoft CSO and Ecrypt CEO sharing an inaugural Security Industry Award which left the investors seemingly unaffected in the hype of the pump. Although the price did have some upward moves until noon, to be fair, but half an hour into the afternoon ECRY published a comment on the obvious pump of the previous days and that pushed the price down the slope right away. The CEO of Ecrypt Technologies Inc., Dr. Thomas A. Cellucci said that they did not authorize the promotion and they are “unaware of any business reason for the sudden increase in market activity”. This may have been enough to turn the session into a deep red one.
However, Quality Stocks emerged on Sunday claiming that they received $25,000 as compensation for a 210 day advertising, marketing, branding campaign in their disclaimer which by the way appears much more realistic than $5.1 million. But even Quality Stocks seem to just ride the wave generated by StockTips and it may be a legit campaign piece from last year. ECRY have a few years of real trading behind them and just doesn’t seem to fit the profile for a pump like this. Most probably nobody paid StockTips $5.1 million if at all.
Secondly, the fuel in the pump seemingly died down after two days into the “BIGGEST pick to date” campaign and no new promo e-mails were sent out to the “Boys and Girls” as the promoter put it. There is some chatter and speculation in the OTC investor community about a suspected “ploy to fill the gap” and a new pumping rally afterwards. StockTips co-editor, Mike Statler (a fictional name), mentioned in his second e-mail that he was expecting to cover ECRY into the new year which is by the way a good month away.
It would appear that ECRY may be just a victim in this case. Since there is “no business reason” behind the run, there is a high probability that the price will come crashing down. Some investors and some pump players will probably get burned. ECRY may lose some credibility too. Although the management did the responsible thing and distanced itself from the pump, it may have been too little too late for some.
ECRY hasn’t been doing particularly well anyway. According to their latest 10-Q they had zero revenue, $25,868 in cash, $1.8 million total liabilities and $164 thousand net loss. Still, the last thing they needed was a pump and the following crash. At the time of this writing, ECRY is already down to $0.202.
