Endeavor IP Inc (OTCBB:ENIP) Takes Another Hit

The pump for Endeavor IP Inc (OTCBB:ENIP) was going along pretty well until Monday. The emails, the landing pages, and the specially-made video were proving successful at convincing people that the ticker is really worth investing into. The upward trend was rather strong and although trading was not as explosive as what we’re used to seeing from million-dollar promotions, volumes were healthy enough.

As we wrote in our previous article, however, something went horribly wrong on Tuesday when the ticker started sliding down during the very first minutes of the session. By the end of the day, ENIP had dropped by more than 13% and was starting to worry the inexperienced investors who had jumped in lured by the pumpers’ promises of wealth and fortune.

The crash shaped Wednesday’s session which ended on a positive note, but the smaller trading volume suggested that traders were cautious. About an hour before the closing bell, however, something happened that was to influence them a whole lot more.

A Seeking Alpha contributor who calls himself Penny Stock Realist published an article in which he expressed his opinion on ENIP. He’s not exactly a fan.

You can have a look at all of his arguments through the link, but, to recap his expose, he says that the company is worth $0, that if you are currently in, you should get out as quickly as possible, and that the ticker presents an excellent opportunity for short sellers (according to the disclosure statement, he held such a position at the time of writing).

The coverage appeared on ENIP‘s Yahoo! Finance profile which meant that traders had a really quick access to it and reacted immediately. It was published around 3:30 PM when the ticker was hovering around $1.19 but when the closing bell rang an hour later, it had dropped to $1.16.

By yesterday morning, the word had spread around further which resulted in absolute carnage. ENIP opened the session at $1.10 and while it somehow managed to remain relatively stable during the first few hours, it took a rather scary dive in the afternoon. It finished the day at $0.9581 (the first sub-dollar close in more than two weeks), racking up a dollar volume of $1.04 million.

Some people would probably say that Penny Stock Realist’s article is nothing more than a way to depress the price, thus helping short sellers reap bigger gains, but whatever his motives are, we must say that he manages to expose the pump and some of the red flags that we’ve been talking about for the last couple of weeks. The question now is: “Will ENIP manage to get back to its feet?”.

The pumpers have certainly not given up. There aren’t any new emails , but the message boards and the social media is still buzzing with links that are posted by people who are compensated for doing so. That’s not really surprising.

Judging by the $1 million budget and the pumpers’ former picks (as we noted in our previous articles, the same people were in charge for the promotions on Sanborn Resources Ltd (OTCMKTS:SANB) and Supernova Energy Inc (OTCMKTS:NHUR)), we might see another climb or two.

You should also keep in mind that C America Marketing, the entity managing the promotional budget, holds “a large amount of shares in ENIP” and we’re quite sure that they’ll want to sell them at the best possible price.

Whatever happens from now on, however, the risks of a potential investment are huge an considering them carefully before making any decisions is absolutely crucial.