IBSG International, Inc. (OTCMKTS:IBIN) Spikes Suddenly

After months of sitting virtually idle, IBSG International, Inc. (OTCMKTS:IBIN) suddenly broke out on Friday and registered some astonishing results. Trading was heavy since the very beginning of the session and a lot of buying pressure helped the price jump to an intraday high of more than $0.06. It settled down to a more modest (but still respectable) $0.038 which is around 31% above Thursday’s close. More than 8 million shares changed hands which equates to around $360 thousand in dollar volume. Naturally enough, we had to check and see what is causing the sudden spike but before we get to the culprit, we would like to offer you a quick glimpse into an interesting period in the company’s history.

On November 14, 2008 IBIN filed the 10-Q for the period ended September 30, 2008 and we should say that the statement looks quite good. According to it, back then, IBIN had around $9 million in cash, $25 million in working capital, revenue for the first three quarters of the year of around $12.9 million, and a net income of $3.1 million.

Things were undoubtedly looking good, but then, something strange happened. About a month after the filing of the 10-Q, IBIN‘s CEO, Dr. Michael Rivers was relieved of his duties due to health-related reasons. A person by the name of Jim Queen took the helm and shortly after his appointment, a series of 8-K forms were filed which informed investors that the new management team weren’t quite sure about IBIN‘s financial positions. An investigation began and in January 2009, they told us that the 2008 reports “should not be relied upon“.

This also caught the attention of the SEC and in September 2009 they filed a complaint against Dr. Rivers alleging him of fraud. Apparently, a substantial part of the revenues reported were the direct result of false contracts and in March 2011, the Court found Dr. Rivers guilty of violating a number of rules and regulations. As you might have guessed, he is no longer a part of IBIN‘s management team (he was arrested on other charges in March 2013) but even so, there are some things you need to keep in mind while considering the options.

Namely, the fact that we’re not sure if the company even exists anymore.

As we mentioned, when the new management team took the helm back in late-2008, they started their own investigation on Dr. Rivers’ reports but unfortunately, they never revealed what their findings were. At one point they decided to stop filing periodical reports with the SEC and we haven’t heard from them since.

With that in mind, yesterday’s spike is quite bizarre. In fact, we had to do quite a lot of digging around to find out what the cause of the sudden movement was and after hours of research, all we managed to uncover was this alert page on a website called Waters Alerts (WA).

By the looks of things, WA is put together by a single investor (not surprisingly, he’s called Walter) and he claims that he hasn’t received any compensation for his efforts on IBIN. Even so, the lack of any new information regarding the company’s situation means that the ticker is currently nothing more than a speculative play that is attracting quite a lot of attention. This, in turn, raises the possibility of a sudden and violent crash which is why, considering the risks very carefully is absolutely crucial before making any investment decisions.

There were some other companies that registered quite a lot of volume during Friday’s session. Axion International Holdings Inc. (OTCBB:AXIH), for example, jumped by around 35% in anticipation of a conference call that will take place after the end of tomorrow’s session. Tiger Oil and Energy Inc (OTCMKTS:TGRO), on the other hand, slipped by nearly 16% after the promotional pressure started to get a little high.