The Pump for New Media Insight Group, Inc. (OTCMKTS:NMED) Picks Up Speed
Last week investors around message boards began reporting that a hard mailer brochure touting the stock of New Media Insight Group, Inc. (OTCMKTS:NMED) has been put into circulation and that now they were receiving it in their mail. The outfit that created the mailer was Wall Street Revelator who did it for a $10 thousand compensation. The same entity is also behind the landing page that was put online a couple of months ago.
In the mailer Andrew Carpenter, the editor of Wall Street Revelator, assigns NMED a short-term price target of $5.25. Although such valuation is already quite optimistic just wait until you see that the long-term target is over $28 dollars per share. So let’s see what this future $28 dollars per share company has to offer.The financial report for the quarter ending July 31 revealed the following financial results:
• $130 thousand cash and total current assets
• $7244 total liabilities
• ZERO revenues
• $94 thousand net loss
Despite the rather depressing numbers the artificial hype created by the pump is luring investors in. Last Thursday NMED surged up the chart by 15%, passed through the $1 dollar mark and closed at $1.09. Throughout the session the unprecedented number of 489 thousand changed hands. Well, on the very next day that amount got surpassed easily when investors shifted 718 thousand shares. NMED gained another 6% and reached $1.16 per share. Even at this price the market cap of the company of $34.5 million is reaching ridiculous levels.
When you encounter a stock undergoing a paid promotion you should ask yourself the question – who is going to benefit the most from the increased awareness? In the case of NMED the answer is quite obvious. The disclaimer at the end of the hard mailer states that CTSV Investments, the party paying for the whole promotion, own 1 million shares and are willing to sell them on the open market. They also have warrants with an exercise price of $1 dollar, which is already lower than the current market price, that could be turned into another 1 million shares.
In the past, however, even more shares have been sold at extremely cheap prices. Note 3 of the quarterly report shows that since 2010 17 million shares have seen the light of day at just $0.0006 while another 12 million have been sold at $0.005. If unleashed on the market these shares could devastate the price of the stock while at the same time bringing millions in gains for their owners.
At the moment NMED should be considered as a pump play only. Plan you trades carefully and take into account all of the risks around the stock in order to avoid any unpleasant surprises.
