The PR War Around Nuvilex Inc (OTCMKTS:NVLX) Rages On
We’ve been covering Nuvilex Inc (OTCMKTS:NVLX) for a fair few months now and we’ve always had one problem with the current situation of the company – the abnormally high amount of excitement going on around the stock.
It all started back in June 2011 when Goldman Small Cap Research decided to put a $0.50 per share price target on the ticker but at first investors didn’t really seem all that interested. Quite frankly, there was little to get excited about and the only reasonable explanation for Goldman’s optimism is the fact that they received some money for their so-called reports.
When NVLX announced that they’re entering the medical marijuana business earlier this year, however, everything changed. The run displayed in May was particularly impressive. The volumes exploded and while it still fell short of the rather utopian price targets, NVLX did manage to reach values of more than $0.20 per share. Unfortunately, it was clear that the pressure was getting too much and it soon settled down to a more manageable price.
The people with the paid research reports, however, remained undeterred. Stock Market Media Group (SMMG) joined the party and they, along with Goldman Small Cap Research, have been filling NVLX‘s Yahoo! Finance profile with an astonishing number of articles ever since. SMMG also received some money for their efforts and just like Goldman, they set a high price target with little in the way of factual evidence that could suggest the huge growth.
The newsletters weren’t left behind and they too jumped on the bandwagon. Between January 30 and today, we have received around 120 emails from a host of promoters all saying that NVLX is the next big thing in medicine.
Apparently, we weren’t the only ones noticing the fact that way too many people are trying to raise some awareness around NVLX and on August 15 a Seeking Alpha contributor named Nicholas Kitonyi published an article in which he expressed his rather negative opinion on the ticker. The effects were immediate – 14% of the value was wiped out in six and a half hours of trading.
OTC Journal (another entity that got paid to “research” NVLX) were, apparently, quite upset with the fact that someone had taken a less optimistic view on the ticker and they published a sort of response to the Seeking Alpha coverage suggesting that “someone is being paid under the table on behalf of short sellers”. Whether that’s true or not remains unknown but the truth is, Mr. Kitonyi has focused some of his arguments on cold hard facts which include the lack of financial stability and the array of previously failed products – things that are absent from the reports of OTC Journal, Goldman Small Cap Research and the rest of the entities touting the ticker.
Nevertheless, NVLX did manage to make some sort of recovery, but on Monday, it took a second blow. Another Seeking Alpha contributor, Mr. Alan Brochstein, presented his views on the company’s long-term potential and he too doesn’t appear to be the biggest NVLX supporter. Once again, just a couple of hours later, OTC Journal came on the news to vigorously defend the ticker by speaking about “Phase 3” trials (a phrase that is non existent in the latest 10-K).
The newsletters led by Stock Lock And Load received some money in order to fight back the negativity coming from Seeking Alpha and it’s all starting to get really confusing for the regular trader who is contemplating his next move. One thing is for sure, opinions range from “a worthless piece of paper” to “the biggest thing to come out of the OTC Markets”, but realistically, the truth is somewhere in the middle. NVLX do have a noble cause and they are working on a technology that does sound extremely clever. The lack of financial stability, however, could be a massive hindrance to their progress. As for the stock, the artificial excitement on the one hand and the recent negativism on the other is wreaking havoc at the moment. Unfortunately, we can’t say if the end of the whole malarkey is near.
