The Pump for Endeavor IP Inc (OTCBB:ENIP) is Heating Up

It’s been nearly three weeks since Endeavor IP Inc (OTCBB:ENIP)’s stock started appearing on investors’ radar and it’s fair to say that things have been going rather well. In fact, out of the sixteen sessions between October 16 and yesterday, only two ended in the red and the price has moved from around $0.75 per share all the way to $1.17. It’s clear that ENIP isn’t the fastest mover around (we have yet to see daily gains of more than 9%), but it is moving and it’s proving to be exceptionally consistent for a penny stock. How long will it last though?

We’re not holding our breath just yet. While ENIP did issue a couple of press releases that certainly gave investors something to cheer about, most of the brouhaha around the ticker has been created by the $1 million stock promotion that was initiated during the first active days of trading.

As we mentioned in our previous articles, the pumpers’ main tools for creating awareness around ENIP include an eight-minute-long video posted by 900 Percent Stocks as well as an article on Financier Times, an advertorial famous for taking part in the promotions for Sanborn Resources Ltd (OTCMKTS:SANB) and Notherhumberland Resources, Inc. (now known as Supernova Energy Inc (OTCMKTS:NHUR)). You can see that there’s already enough promotional pressure which means that the stock might cave in at any point. Apparently, however, some people think that it’s not enough.

A press release from Monday informed us that Goldman Small Cap Research (GSCR) has initiated a coverage which comes in the form of a seven-page report called “Endeavor IP – IP Firm Could Ultimately Be Worth Hundreds of Millions“. GSCR’s optimism is to be found below the headline as well, where they put a price target of $3 per share and talk at length about other patent trolls that have managed to make a fortune through intellectual property monetization. Of course, Goldman didn’t really write the report for the fun of it. The fine print on page six reveals that a third party has paid $4,500 for a research subscription service. Over the next days we will probably see countless optimistic articles hitting the wire, getting investors excited, but giving them no new information about ENIP. At least that’s what’s been happening to Nuvilex Inc (OTCMKTS:NVLX) (another GSCR pick) over the last couple of months.

GSCR’s involvement isn’t the only development around the pump. We mentioned in our latest coverage that some of the investors around discussion boards were starting to see exactly what’s going on. Apparently, the promoters weren’t particularly happy with this fact and to change it, they paid some users to flood the forums leaving no room for actual discussion. A new post appears every few minutes and, as you might imagine, they’re all full of optimism.

The increased awareness might serve as an explanation for the massive trading volumes from the last couple of days. Although it gained only 4.46% yesterday, ENIP managed to shift more than 1.1 million shares worth around $1.4 million which is an absolute record. Unfortunately, with so much money involved, the risk of a sudden and dramatic drop becomes bigger and bigger.

In many ways, ENIP‘s performance from the last two weeks is reminiscent of the one displayed by Pan Global Corp (OTCMKTS:PGLO) from the first days of its $1.1 million promotion. As you can see, the direction for PGLO was up until Tuesday when it slipped and fell hard, wiping out around 66% of its value in just two sessions.

There can be no guarantee that ENIP will follow in PGLO‘s footsteps, but you can be sure that a market cap of around $50 million can not be justified by a company that, according to its latest financial statement, has around $500 thousand in current assets and a nice residential house as a principal office. Make sure you weigh the risks carefully and consider all the red flags before jumping in.