Red Giant Entertainment, Inc. (OTCMKTS:REDG) Bounces on Expected Analyst Coverage
After a dreadful streak that saw the share price of Red Giant Entertainment, Inc. (OTCMKTS:REDG) crash about 75% from its humble recent high at just over a cent, yesterday REDG shuffled up again and closed 40% in the green. Daily volume picked up once again, at 362 million shares changing hands as traders were spurred along by a new press release from REDG.
The company announced that Murphy Analytics will be providing coverage of REDG in a report that is to be released soon. Somehow, REDG thinks this report will provide ‘even greater transparency’ for investors. The reality of the matter is a little different.
Murphy Analytics provided research reports and coverage on multiple penny stocks in the past. Sadly, most of the companies covered went south soon after the coverage, and fast. Those include Arrayit Corp. (OTCMKTS:ARYC) covered in November last year, now 75% below its price levels at the time of the report, as well as New China Global, Inc. (OTCMKTS:NCGI), now 90% down from the time of the Murphy Analytics (MA) report.
A collateral factor that might explain this is the nature of the so-called reports complied by MA. Each report culminates in a wordy disclaimer that lists monetary compensation, usually $5000 per report, paid to MA directly by the company covered. The disclaimers of past reports also state that MA does not guarantee the ‘reliability, accuracy or completeness’ of information published, making the reports, at least in part, paid advertisement, as some of them do contain lengthy lists of risk factors.
Considering the majority of traders probably did not take the time to check what exactly MA reports are, the sudden excitement that pushed REDG back up is not too hard to explain. With no new filings coming from REDG, the last public information on the company is contained in its dreary report for the quarter ended November 2013, listing under $100 in cash and $3 thousand in quarterly revenues.
More details on REDG‘s last quarterly report as well as the early 2013 $500 thousand pump job that burned many hopeful traders can be found in our previous article on the company. Meanwhile, caution is advised when trading perceived ‘cheapies’. Doing one’s own due diligence should never be skipped under any circumstances.
