Search Results for “"promoted stock"” – Page 3

On Avoiding Con Men

Posted on 22 August 2013 by David Merkel

I’ve written on this topic before, but I want to take a different angle of attack on it tonight.? Before I do, I would like to give links to some of the things I have written on the topic:

Okay, enough.? I’m surprised that I have written so much on this topic.? There’s more, but I leave out the marginal stuff.

This article is partially prompted by my review of Octopus.? But it was triggered by my receipt of an e-mail today, that when I clicked on the link, led me to something like this.

Passive income is one of the ways that scammers appeal to the greed of people.? You get money, and you don’t have to work.? But passive income stems from buying or creating something that will have continual demand.? That takes effort or ingenuity at taking risk, and if you are wrong, you could lose a lot of effort and/or capital.

Passive income is easy to achieve.? What is hard is making sure that it continually rises, and that it stays at a high level relative to capital deployed.

With President Obama, his book “The Audacity of Hope” brought him a lot of passive income.? But there was risk involved; who knew that he would be elected President?? Few of us writing books will get so great an audience, and get such a long tail.? Most books are here and gone.? Same for most songs.? Same for most plays, etc.? Royalties are not as easy as they seem.

Most royalties are wasting assets.? Mines get mined out.? Wells go dry.? Things that are published stop selling as much.? In that sense they are worse than bonds, because the yields decrease over time.

So, no, passive income isn’t a solution, and may end up delivering less than conventional investments.

Developing a Defensive Mind

I have a saying:

Minds work best when they are like castles, when there is a moat, and defenders at the ready to deal with deceivers with arrows and boiling oil.

Here is my main advice: you need to be skeptical, but not cynical.? Skeptics question, but can be convinced with adequate evidence.? Cynics think the world is rigged.? Here’s their flaw — they can be tricked into scams where they think they are on the rigging side, when they are not.

Here’s my advice to aid your thinking: the world is not rigged.? There are few if any significant conspiracies that deny wealth and power to the masses.? The reality is more banal.? Some people, as a result of their training, networking, and effort do better than others.? Most people don’t put forth sustained, focused, intelligent effort that allows them to accumulate wealth.

Are there some that make money off of government connections?? Yes, but they are not the rule, and they don’t advertise for passive capital.

Passive capital is a highly competitive place to be.? Making money with money is desired by financial institutions, pension plans, endowments, etc.? If there were an easy way to do it, the big guys would have figured it out long before you.

If it seems to good to be true, it probably is

Trite, but true.? Condition your mind to dismiss schemes that cannot fail, investments that are a one way ticket to riches, etc.? Get a sense of the scammer voice, where he invites you into a secret “club.”

Look, if I had a path to easy riches, would I share it?? No.? All riches stem from hard mental or physical work, even if you inherit it.? That is why you have to distrust those who try to scam you through proffering easy riches.? There are no easy riches.

There are no secrets in investing.? Don’t let anyone tell you that they have a secret tactic.? I don’t have a secret tactic.? I do have my own methods, which draw from a lot of well known methods, and my own sense of what works in business, which also stems from well-known ideas.

Avoid anything that makes you think you are in the inner ring — the precious few, who due to connections have been able to escape the ordinary lot of men, because they are part of the club that has the secret, or government connections to a secret program.

If someone has a great opportunity, and need passive capital, they will advertise it boldly, because they want the cheapest cost of capital.? Those that limit the message to a select few are likely scamming.

Final Points

Pay attention to auditors and custodians.? They protect you, and they should be high quality, and unaffiliated with the promoter.? Avoid those that do not market broadly — what I mean here is those that don’t go through major brokers.? The more exposure an idea has the more likely it is valid.?? That said, highly exposed ideas will likely produce market-like returns.? There is a trade-off here.

Also, all investing involves uncertainty.? Reject those that tell you something is a sure thing.? THERE ARE NO SURE THINGS!

Sigh.? Do I have to go to that level of emotion/energy?? I GUESS I DO! Because the scammers keep coming around and milk the unwary.

PS — I know my readers are smarter than most, but if you have friends or relatives that you think might need this, please forward it on.? Delete this last line to protect their self-esteem.

Not Natural Gas, Just Flatus

Posted on 26 July 2013 by David Merkel

Okay, time for the promoted stock scoreboard:

Ticker	Date of Article	Price @ Article	Price @ 7/25/13	Decline	Annualized	Splits
GTXO	5/27/2008	2.45	0.008	-99.7%	-67.1%
BONZ	10/22/2009	0.35	0.002	-99.3%	-73.5%
BONU	10/22/2009	0.89	0.005	-99.4%	-74.3%
UTOG	3/30/2011	1.55	0.005	-99.7%	-91.5%
OBJE	4/29/2011	116.00	0.315	-99.7%	-92.9%	1:40
LSTG	10/5/2011	1.12	0.032	-97.2%	-86.2%
AERN	10/5/2011	0.0770	0.0002	-99.7%	-96.3%
IRYS	3/15/2012	0.261	0.003	-98.9%	-96.3%
NVMN	3/22/2012	1.47	0.300	-79.6%	-69.4%
STVF	3/28/2012	3.24	0.348	-89.3%	-81.4%
CRCL	5/1/2012	2.22	0.040	-98.2%	-96.2%
ORYN	5/30/2012	0.93	0.085	-90.9%	-87.5%
BRFH	5/30/2012	1.16	0.450	-61.2%	-56.1%
LUXR	6/12/2012	1.59	0.016	-99.0%	-98.4%
IMSC	7/9/2012	1.5	1.140	-24.0%	-23.1%
DIDG	7/18/2012	0.65	0.052	-92.0%	-91.6%
GRPH	11/30/2012	0.8715	0.136	-84.4%	-94.3%
IMNG	12/4/2012	0.76	0.160	-78.9%	-91.3%
ECAU	1/24/2013	1.42	0.318	-77.6%	-95.0%
DPHS	6/3/2013	0.59	0.040	-93.2%	-100.0%
POLR	6/10/2013	5.75	0.510	-91.1%	-100.0%
NORX	6/11/2013	0.91	0.510	-44.0%	-99.2%
ARTH	7/11/2013	1.24	0.550	-55.6%	-100.0%

	7/25/2013		Median	-92.0%	-91.6%

Tonight’s loser in waiting is North American Oil & Gas Corp [NAMG].? Formerly known as CalendarDragon, a software company, it became North American Oil & Gas.? If the company were as good as the promoter says it is, it would never have bought a penny stock shell.? It would have negotiated with private equity companies.? Why would you make great claims, and yet:

Have negative income, always
Negative net worth
No revenues, always

Note the risk factor from the 8-K:

We have no oil or gas reserves, and the probability of an individual prospect ever having oil and gas is extremely remote and therefore any funds we spend on exploration will likely be lost.

?

The probability of an individual prospect ever having oil and gas is extremely remote. In all probability, the property does not contain any oil and gas. As such, any funds spent on exploration will probably be lost which will have a negative effect on our operations and a loss of your investment.

This is a constant with promoted stock scams.? They work on dud companies, then a promoter tells a story.? The SEC should prosecute such newsletter writers.? The scams could not work without them, at least for now.

Anyway, expect losses here, as usual.? The major energy companies have a far better idea of where they can find energy than a few people can.

Finally, please note in the 4-point type that the writer is getting paid over $100,000 to write the piece, and he does not have a lot of costs, because it is done online.? I saw the ad at Bloomberg.com.? Hey, Michael Bloomberg, Hopkins Grad like me!? Do you want to be associated with penny stock promotions?? You don’t have enough money already?

This stuff stinks.? Really stinks, like flatus.

One Small Victory versus Stock Promotion

Posted on 11 June 2013 by David Merkel

Okay, here’s the promoted stock scoreboard:

Ticker	Date of Article	Price @ Article	Price @ 6/11/13	Decline	Annualized	Splits
GTXO	5/27/2008	2.45	0.011	-99.6%	-65.8%
BONZ	10/22/2009	0.35	0.004	-98.9%	-71.2%
BONU	10/22/2009	0.89	0.010	-98.9%	-71.2%
UTOG	3/30/2011	1.55	0.004	-99.7%	-93.3%
OBJE	4/29/2011	116.00	0.554	-99.5%	-92.0%	1:40
LSTG	10/5/2011	1.12	0.031	-97.2%	-88.1%
AERN	10/5/2011	0.0770	0.0002	-99.7%	-97.1%
IRYS	3/15/2012	0.261	0.003	-98.9%	-97.4%
NVMN	3/22/2012	1.47	0.080	-94.6%	-90.8%
STVF	3/28/2012	3.24	0.390	-88.0%	-82.8%
CRCL	5/1/2012	2.22	0.059	-97.3%	-96.2%
ORYN	5/30/2012	0.93	0.175	-81.2%	-80.2%
BRFH	5/30/2012	1.16	0.300	-74.1%	-73.0%
LUXR	6/12/2012	1.59	0.023	-98.6%	-98.6%
IMSC	7/9/2012	1.5	1.066	-28.9%	-30.9%
DIDG	7/18/2012	0.65	0.070	-89.2%	-91.6%
GRPH	11/30/2012	0.8715	0.180	-79.3%	-94.9%
IMNG	12/4/2012	0.76	0.180	-76.3%	-93.8%
ECAU	1/24/2013	1.42	0.420	-70.4%	-96.0%
DPHS	6/3/2013	0.59	0.107	-81.8%	-100.0%

	6/11/2013		Median	-95.9%	-91.8%

Dephasium has fallen almost 82% in 6 days.? It is a definite over-achiever in losing money.

I promise this is not going to become an “all promoted stocks, all the time” blog.? I limit it to when I receive promotions.? I got another one today, this time to my e-mail.? The future loser is Norstra [NORX].? You can see a promotion like the one I saw here.

Here are the bullet points:

Never had a penny of revenue.
Consistent losses every year.
Only stays afloat by selling stock.
Auditors don’t think they are a going concern.
If management has been selling shares to get cash at $0.001, why is the stock trading near $1?

It is highly likely that this company will do badly, as have other promoted stocks that I have written about.? But here’s the fun part — I wrote to the guy whose organization sent out the promotional e-mail.? He didn’t know that they were doing that; he was concerned for the reputation of his organization, and he is putting a halt to advertising stock promotions.

And so, Aleph Blog happily takes a small victory lap.? Promoted stocks are bad enough, but when reputable firms aid them, it is far worse.

Polar Petroleum, Frozen

Posted on 10 June 2013 by David Merkel

I’m not going to run the promoted stock scoreboard again so soon, but let it be known that Dephasium has fallen ~75% in the 5 days since I wrote about it.? Put on your peril-sensitive sunglasses, here is the chart:

Yes, my article was written at the peak.? In this case the “dump” was rather violent.

But why I am I writing about promoted stocks this evening?? This morning in my e-mail, I received this [note: after a little time, this link won’t work].

But who sent it to me?? The Washington Times.? After receiving it, I sent someone in their web area this letter:

YYY,

I don?t know if you handle this aspect of Washington Times advertising, but today I received a promoted stock ad for a fraudulent company from the Washington Times via e-mail.

The company?s name is Polar Petroleum [OTCBB: POLR], a company which:

Has never earned a penny of revenue.

Was a ?technology company? until last year, ?Post Data.? From its last 10K: ?The Company intends to market a service of decommissioning electronic data storage devices, making them inoperable and thereby making the electronic data contained therein or on permanently un-recoverable.?

Is likely being used by the promoters to do a ?pump and dump,? where affiliates do a series of transactions that inflate the price of the thinly traded stock, and use this promotion to dupe people into buying out their shares at inflated prices, leaving them holding stock of a worthless company.? The net worth of the company is $0.005/share ? It trades near $5 thanks to the pump.

It?s dishonest for the Washington Times to participate in crud like this.? Why is the Times selling its reputation for a bunch of promoted stock scammers?

Sincerely,

David

PS ? I have written about this extensively.? Here is a sample:

http://alephblog.com/2013/06/03/another-lousy-promoted-stock/

To have a reputable newspaper convey the garbage that the promoters put forth is new, and worrisome.

But about the same time that I hit the “Send” button, the SEC took action.? They suspended trading in POLR.? They justified it here.? Good work, SEC!? (Can’t remember the last time I said that.)? And if you want to see the reactions of those that follow promoted stocks regarding POLR, you can see it here.

Though the loser promoting this garbage said it would go to $27, I’ll give you a different prediction: it will go to less than fifty cents within a year.? Given the actions of the SEC, it could easily go there on June 24th, when trading reopens.

Here is my advice to the SEC: maybe you could create a unit that follows promoted stock fraud, and do exactly what you have done with POLR to every promoted stock scam.? It would eliminate a significant area of fraud in our equity markets.

Another Penny Stock to Avoid

Posted on 5 December 2012 by David Merkel

I received a “newsletter” today from Legendary Stocks.? Now with a name like “Legendary Stocks,” you would think the companies would have a long prior existence.? But the stock mentioned I can’t even find on EDGAR, which is different from all the other penny stocks I have analyzed.

As with all the rest, this doesn’t smell good.? This is a company with small revenues, negative earnings, and negative book value.? Though it trades in the US under the ticker IMNG, I can’t find much data on it.? Even their website has no investor data.? That is abnormal.

Oh, this was a part of Legendary Stocks, 5-point type size? disclaimer:

Legendary stocks has been contracted to receive and manage budget of eight hundred thousand dollars by a third party prime star communications agency for coverage of iMing. In addition, The Legendary stocks expects to receive new subscriber revenue as a result of this advertising effort. [Emphasis mine]

Leaving aside the concept that many Chinese stocks listed in the US are scams, where assets and earnings are misrepresented, there is little independent data to work with here.

But given the 93% decay rate on promoted penny stocks, I predict that by my next birthday, 12/5/2013, IMNG will trade for less than 10 cents a share, adjusted for reverse splits from the present.

I say to all who hear me: avoid promoted stocks.? Buy what you have analyzed: don’t trust what others think, even me.

Not a Diamond, it is Only Graphite

Posted on 1 December 20122 December 2012 by David Merkel

It’s been two months since I have written about promoted penny stocks.? Let’s start with how the penny stocks I have written about have done.

Ticker	Date of Article	Price @ Article	Price @ 11/30/12	Decline	Annualized	Splits
GTXO	5/27/2008	2.45	0.018	-99.3%	-66.3%
BONZ	10/22/2009	0.35	0.029	-91.7%	-55.2%
BONU	10/22/2009	0.89	0.087	-90.2%	-52.7%
UTOG	3/30/2011	1.55	0.020	-98.7%	-92.6%
OBJED	4/29/2011	116.00	1.500	-98.7%	-93.5%	1:40
LSTG	10/5/2011	1.12	0.036	-96.8%	-94.9%
AERN	10/5/2011	0.0770	0.0003	-99.6%	-99.2%
IRYS	3/15/2012	0.261	0.090	-65.5%	-77.6%
NVMN	3/22/2012	1.47	0.210	-85.7%	-94.0%
STVF	3/28/2012	3.24	0.390	-88.0%	-95.6%
CRCL	5/1/2012	2.22	0.430	-80.6%	-94.0%
ORYN	5/30/2012	0.93	0.205	-78.0%	-95.0%
BRFH	5/30/2012	1.16	0.459	-60.4%	-84.1%
LUXR	6/12/2012	1.59	0.041	-97.4%	-99.96%
IMSC	7/9/2012	1.5	1.200	-20.0%	-43.2%
DIDG	7/18/2012	0.65	0.270	-58.5%	-90.7%
GRPH	11/30/2012	0.8715	0.8715	0.0%

?Now	11/30/2012		Median	-89.1%	-93.0%

And now a little bit of news:

1) Obscene Jeans Corp. [OBJED] did a 1-for-40 reverse split.? Almost no one makes money on reverse splits.? But it does allow the company to reboot, issue more cheap shares, and continue the scam.

2) I was contacted by a lawyer suing Luxeyard [LUXR].? Won’t give most details, but it does not surprise me that the stock has dropped so much in so little time.? The dilution from the stock offering did a lot of it, and losing money is the rest.

3) It is fascinating to me that promoted penny stocks tend to lose value at a 93% per year basis.? That is very reliable.? None of the penny stocks above have gains.? They all lose.? So, why should anyone invest in them?? No one should.

I toss out the idea that there may be some good small-cap companies out there that deserve attention.? Run stock screens, and analyze them yourself.? Don’t trust the pitches of others.? If you must listen to those that pitch small cap stocks, at least stick with someone that has no agenda, like AAII.? Go ahead, invest in their shadow stock portfolio.? It has trounced the averages.

Graphite, not a Diamond

Okay, here is tonight’s promoted stock: Graphite Corp.? At first, I was kind of surprised by the pedestrian nature of this stock, but as I looked at it, I realized, “Okay, yeah, graphite pricing has gone up a lot since the Chinese started to ration their sales, since in the past, they were 80% of the supply.”

But Graphite Corp. has no revenues, negative earnings, scanty book value, and has never mined an ounce of graphite in its existence.? It’s management team is not a top-flight bunch of miners.? It is a development stage company that was once targeted to be a “third party reseller of medical office business solutions.” (see page 5)

This is typical of penny stock promotions.? The promoter spins a great tale, but there is little to nothing there.?? Graphite is produced in mines, but it is also produced synthetically.? The high prices for certain types of graphite may create new technologies that allow synthetic graphite to be produced in larger, purer sheets.? That’s a speculation on my part, but large price moves, like that of high-quality graphite moving up 150%, invites not only new mines, but new technologies.

Okay, but let’s look at the development of this company, and how its stock got issued:

This is the statement of shareholder’s equity from the recent 10-Q.? I have added the last column to show you the prices where stock was issued.? No insider ever received stock at prices higher than a nickel per share.? Ask yourself, why can’t you get stock at a nickel per share, so that you could sell it at 87 cents per share?

Also note the way the share count has ballooned — they keep issuing shares, because they have little cash to pay parties with.? Five years ago, 1.5 million shares.? Today, nineteen-plus times that — 28.7 million shares.? And the company has done nothing aside from raising money, and unsuccessfully speculating.? If we liquidated the company now, we would get 2.28 cents per share, not the 87 cents it has recently traded at.

The only way a company gets that kind of valuation is through promotion/advertising.? And what were the incentives for those that put this in my mailbox today?

The writer had this incentive:

John Person Inc., dba National Futures.com did not receive any direct compensation (other than future subscription revenues, the amount of (which is not known at this time) with respect to the publication of this Advertisement. John Person Inc. has received $20,000 in cash compensation from Greenstone Media, LLC. to endorse this advertisement. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this newsletter as the basis for any investment decision .While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Only invest in monies you can afford to lose.

To their credit, the bolding is theirs.? What incentive did the advertiser have?

Third Party Advertiser/Advertising Agency IMPORTANT NOTICE AND DISCLAIMER: Greenstone Media, LLC., the third party advertiser, has paid $1,179,405 to Diamond Spot Media, LLC (DSM) as of October 24, 2012 for this advertising effort in an effort to build investor awareness. DSM shall retain any amounts over and above the cost of creating and distributing this advertisement which advertises The Bottom-line Newsletter coverage of Graphite Corp. Advertising services include; production, outsourced advertising copywriting services, mailing and other related distribution services and advertising media placement costs. Greenstone Media LLC, the third party advertiser, is a company based in Charlestown, Nevis. Greenstone Media LLC. the third party advertiser, has represented to DSM in writing that it does not own any shares of Graphite Corp. except for restricted stock which Greenstone Media, LLC. has represented to DSM in writing that it will not sell, pledge or hypothecate or otherwise agree to dispose of for 90 days following the initial dissemination of this advertisement. Greenstone Media LLC., has also represented to DSM in writing that neither it nor its affiliates will buy or sell any shares of Graphite Corp. during the period that this advertisement is being disseminated by DSM or third party media vendors.

That’s a weak disclaimer.? “Affiliates” may not mean owners or clients.? My sense is that large owners of Graphite Corp will use this opportunity to sell stock, feeding losses to a gullible public, and they could be the ones that funded the stock advertisement.? Makes a lot of sense, after all, who would benefit most from the advertisement?

As I often say, “Don’t buy what someone wants to sell you.? Buy what you have researched and you know has value.”? With promoted stocks, they are selling financial poison.? Avoid it like the plague, unless you get a kick out of losing 93%/year to scammers.

My Two Cents on Two Promoted Penny Stocks

Posted on 10 July 2012 by David Merkel

Via Tadas Viskanta of Abnormal Returns, Zestinvest.com approached me regarding and intriguing promoted stock, Implant Sciences [IMSC].? Read his article, he will say more about it than I will.

From my angle, this is another low revenue, negative net worth, negative earnings stock, which I think every sane investor should avoid.? But there are a few interesting aspects to the scam:

There is the outside possibility that their services will be bought by an arm of the US Government, in an effort against terrorism.
It is being touted by Gene Marcial at Forbes, and at other blogs of his.? Gene Marcial has a financial interest in CPreports.com, which gets paid to publish favorable research on companies.
It is being touted by Ray Dirks, which disappoints me.? I always thought better of him, given his early contest regarding insider trading? in the Equities Funding scandal, which he successfully contested to the Supreme Court.? (And as a kid of 13, I sent away for his research on low P/E stocks!? What a guy! Maybe.)

This is a company that is likely to be taken over by its lender in three months, leaving the equity with zero, or nearly that.? The company is so deep in debt that I suspect their lenders will not get paid in full either.

-==–=-==–=-=-=–=-=-=-=-=-==-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-

Onto my second promoted penny stock, Luxeyard.? Wait, first the promoted penny stock scorecard:

Ticker	Date of Article	Price @ Article	Price @ 7/9/12	Decline
GTXO	5/27/2008	2.45	0.03	-98.78%
BONZ	10/22/2009	0.35	0.0171	-95.11%
BONU	10/22/2009	0.89	0.065	-92.70%
UTOG	3/30/2011	1.55	0.07	-95.48%
OBJE	4/29/2011	2.9	0.045	-98.45%
LSTG	10/5/2011	1.12	0.152	-86.43%
AERN	10/5/2011	0.077	0.0011	-98.57%
IRYS	3/15/2012	0.261	0.13	-50.19%
NVMN	3/22/2012	1.47	1.46	-0.68%
STVF	3/28/2012	3.24	0.435	-86.57%
CRCL	5/1/2012	2.22	0.67	-69.82%
ORYN	5/30/2012	0.93	0.6	-35.48%
BRFH	5/30/2012	1.16	0.57	-50.86%
LUXR	6/12/2012	1.59	0.35	-77.99%

Aside from very deep out-of-the-money options, I can’t think of anything that does so badly.? Back to Luxeyard.? How did it lose 78% in less then a month?? Go back to my original post:

NBT Equities Research and/or its publisher, ChangeWave, Inc., dba NBT Communications has received $35,000 and been pledged 75,000 shares of rule 144 common shares in LuxeYard to assist in the writing of this advertisement.

Next Media LLC paid $1,500,000 to marketing vendors to pay for all the costs of creating and distributing this report, including printing and postage, in an effort to build investor awareness.

Next Media LLC was paid by non-affiliate shareholders who fully intend to sell their shares into this advertising campaign.

Duuuuuhhhh.? They have plainly told you that they will fleece you.? Few are so bald in their designs.? Why didn’t you listen?? This offering more than doubles the float, on a company that is worthless anyway.? This is just a way for insiders to profit or minimize losses.

So it is no surprise that the stock has fallen so much, notable as it is to fall so quickly.? But this was eminently avoidable.? Remember the Indian saying: “Lie down with dogs; wake up with fleas.”

Pennies from Hell

Posted on 31 May 2012 by David Merkel

I had lunch with Eddy Elfenbein today, and we had a great time together.? After all of the time that we have e-mailed, linked, etc., it was great to make the acquaintance.

Before I start tonight’s post, that makes me want to say this: if you are a blogger that likes me, and you are traveling to the Baltimore/DC area, email me, and let’s get together.? Even if you are marginal on me, try me, and if I accept I will buy lunch.

Many of us as bloggers do a service for the investment community; I have sometimes said that we are the conscience of Wall Street.? Well, tonight’s post is another post to warn people away from a class of investments that almost always loses money: promoted stocks / penny stocks.

As I looked through my archives, I was surprised at how many promoted penny stock I have written about — there were eleven.? Not what I intended when I started this blog, but I go where I think I am needed.? So, what has the performance been of the promoted penny stocks since I wrote about them?

Ticker	Date of Article	Price @ Article	Price @ 5/30/12	Decline
GTXO	5/27/2008	2.45	0.04	-98.4%
BONZ	10/22/2009	0.35	0.02	-94.3%
BONU	10/22/2009	0.89	0.10	-88.8%
UTOG	3/30/2011	1.55	0.05	-96.8%
OBJE	4/29/2011	2.90	0.05	-98.3%
LSTG	10/5/2011	1.12	0.15	-86.6%
AERN	10/5/2011	0.0770	0.0016	-97.9%
IRYS	3/15/2012	0.261	0.160	-38.7%
NVMN	3/22/2012	1.47	1.35	-8.2%
STVF	3/28/2012	3.24	0.53	-83.6%
CRCL	5/1/2012	2.22	1.34	-39.6%

Can I say “Ouch?!”? This is almost as bad as the dot-com bubble, except there are no successes to give the illusion that if you pick them right, you will do fine.

But today, after coming home from lunch, I went to the mailbox and found three (THREE!!) penny stock scams in my mail, two from the same promoter.? I could be wrong, but I think the frequency of penny stock scams is increasing, perhaps out of desperation for some people to make money.

One of the promotions was Circle Star, which I have mentioned before, though this was through a different promoter, and you can see the promotion here.? The writer received $75,000 for his efforts.? Enough said.

Then there was Oryon Technologies [ORYN], Inc.? This company that masquerades as a technology and apparel company, was a mining company three months ago.? It has never earned a dollar of revenue.? Enough said.

The last one was Barfresh Food Group, Inc. [BRFH]? Smoothies as a patentable investment idea is ridiculous.? But at least the disclaimer on this one is honest:

Do not invest in this company unless you can afford to possibly lose your entire investment. NBT Equities Research and/or its publisher, ChangeWave, Inc., dba NBT Communications has received thirty five thousand dollars and been pledged seventy-five thousand shares of rule 144 common shares in Barfresh Food Group Inc. to assist in the writing of this advertisement. Primo Strategies LLC paid one million three hundred thousand dollars to marketing vendors to pay for all the costs of creating and distributing this report, including printing and postage, in an effort to build investor awareness.

and

Primo Strategies LLC was paid by non-affiliate shareholders who fully intend to sell without notice their shares into this advertising/market awareness campaign, including selling into increased volume and share price that may result from this campaign. The non-affiliate shareholders may also purchase shares without notice at any time before, during or after this campaign. A non-affiliate shareholder acted as advisor to Primo Strategies LLC in this market awareness campaign, including providing outside research, materials and information to outside writers to compile written materials as part of this campaign.

and

Third Party/Agency Disclaimer: Content of this message is published by NBT Equities Research, LLC and/or its publisher, ChangeWave, Inc. and sent to select email lists through various marketing agencies to provide readers with information on selected publicly traded companies. Winning Media is managing a total budget of $250,000 for this and other advertisements in an effort to build industry and investor awareness. The $250,000 budget was provided to Winning Media by MarketByte LLC, a shareholder of Barfresh Food Group, Inc. MarketByte LLC reserves the right to buy and/or sell shares of Barfresh Food Group, Inc. at any time. This should be viewed as a potential conflict of interest.

This company has received revenues, but has not earned profits, and has a negative net worth as well.? It was a company searching to buy movie scripts, and realized that smoothies were a better business.? Go figure.? In general, companies that make big shifts in industrial direction are usually horrible companies.

Think about this Differently

Suppose for a moment you did have a great idea that could revolutionize a given business.? Would you:

Try to grow the business using only your own capital, and that of friends and family, and a limited number of? angel investors, until you realize that institutional capital and knowledge is needed to take this to the next level, i.e., venture capitalists.? Advertise where needed, but don’t give potential competitors too much of an idea that you are out there.
Take over a rotted shell of a public company, and use its broken balance sheet to attempt to grow.? Exchange unpayable loans for increased equity stakes for the lenders, diluting yourself.? When their stakes get big enough they engage some third parties to do a pump-and-dump.? Some bozo writes the copy, another bozo distributes it.

No credible idea would come public via method 2, they would work through venture capitalists.? So I would tell you without hesitation that there is never a reason to buy a promoted penny stock.? The large holders are the only ones with sufficient economic interest to promote a pump & dump, and they are likely the ones behind the bozos doing the promoting.

One Public Policy Recommendation

We need to codify something here, that if a brochure says in 12 point type: “Call your broker today to discuss how large a position in Circle Star Energy Corp [CRCL] you can comfortably own,”? (This was in the written brochure and not on the web, as far as I have seen.) then any disclaimer in a smaller, or less readable typeface is not valid in court.? This is an implicit form of fraud, and I believe that the writers and distributors of this drivel, as well as those that paid them should be able to be successfully prosecuted for fraud.

One last thing, to the guys who write these “analyses” that display incredible certainty and opportunity in large type, and then say that this is not really an investment analysis in tiny unreadable type — how can you look at yourselves in the mirror when you are such liars and cowards?

Sorted Weekly Tweets

Posted on 30 March 2012 by David Merkel

China

China’s first bond default could be good market medicine http://t.co/8ShFniYM Bond trader: “We don’t really have a credit risk culture.” $$ Mar 31, 2012
Is China’s slowdown worse than previously estimated? http://t.co/CkZw8tLK Could b business conditions that are worst since 2009. $$ Mar 31, 2012
China Banks Said to Underestimate Local Government Risks http://t.co/qpPicyEe China has a clever bureaucracy; always has; big CYA $$ Mar 25, 2012
Chinese capitalism is just another knockoff http://t.co/w2hSozQL China is not Capitalist; it rewards Party members, not citizens. $$ Mar 25, 2012
Debating a ?Hard Landing? http://t.co/NMnYk2XX friendly debate – Andrew Batson & Patrick Chovanec over China facing a ?hard landing? in 2012 Mar 25, 2012
I Am Jordan’s Complete Lack of Surprise: Chinese Co’s Forced to Falsify Data http://t.co/BMj7ux0T Command & control economy, not free $$ Mar 25, 2012

Market Dynamics

The Nature of a Crowded Trade http://t.co/sf1phJjP A July 2008 article of mine where I reflected on the high correlations of the prior 3 yrs Mar 31, 2012
A Market Lacking Diversification http://t.co/khXUVjaL Correlation conditions similar to 2006-2008, only diversifier hi-qual long bonds $$ Mar 31, 2012
Pension Deficit for 100 US Company Plans Increased 41% in 2011 http://t.co/FdIZTltW Low long hi-qual rates & cruddy returns on risk assets Mar 31, 2012
2277 Stocks and Still Not Diversified? http://t.co/iu0Pw8Ty Recommended solution is similar 2a levered version of the Permanent Portfolio $$ Mar 31, 2012
New from Aleph Blog The Rules, Part XXXI: The offering of liquidity through limit orders is a real service to th… http://t.co/ZiuzWIo5 Mar 30, 2012
Passive Aggressive: Index-Linked Securities and Individual Investors http://t.co/ZrjMCKCz Curbs stock picking, encourages factor timing $$ Mar 29, 2012
Bankers are telling corporate clients this is their chance to refinance http://t.co/Eh9tHEX6 The window of cheap junk financing is open $$ Mar 28, 2012
New from Aleph Blog Replacing Defined Contributions: I think that it is pretty certain that defined contribution… http://t.co/Dis34ql2 Mar 27, 2012
What Will Replace the 401(k)? http://t.co/miLAuoYc How about DB pensions where it depends on how much the employee kicks in plus match? $$ Mar 27, 2012
US Stocks Advance Following Bernanke?s Comments http://t.co/D7sORuIU Stox react 2 increases in inflation expectations. TIPS & Bonds fall $$ Mar 26, 2012
Hedge Funds Capitulating Buy Most Stocks Since 2010 http://t.co/XHwxzxNO Short-term money alert! Will propel mkt 4 a while, then… $$ Mar 26, 2012
If Bloomberg Business Week is a better magazine than old Businessweek (I think so), what magazine should we use now 4 a dumb $$ indicator? Mar 26, 2012

Asset Management

Nontraded REITS should be a nonstarter for clients http://t.co/O1ZuMvX8 And here’s one that just announced a 72% loss: http://t.co/la8d29my Mar 31, 2012
Oaktree IPO Could Pay 2 Founders $117.2M Each http://t.co/Yufla6Jk The Most Important Thing is getting rewarded 4 building AUM 😉 $$ Mar 31, 2012
The Trouble With Exchange Traded Notes http://t.co/ZL7dVpjO Unsecured credit, total return swaps, low level of regulatory protection $$ Mar 31, 2012
Good 4 all of us RT @frankvoisin: My interview Research Magazine’s April issue: http://t.co/zioono6R Also features @VitaliyK @alephblog $$ Mar 30, 2012
Bain Gave Staff Way to Swell IRAs by Investing in Deals http://t.co/4LlAExBt Letting employees in on the fun shares the wealth. Good $$ Mar 30, 2012
Lying By Omission: Mutual Funds, Track Records & Departing Managers http://t.co/4MUyNRYs Track recrds shuld b suspended when critical ppl go Mar 29, 2012
New from Aleph Blog A Pox on Promoted Stocks (2): By this time, I would think that it would be worth the the tim… http://t.co/DJkH6E4W Mar 28, 2012
The Measured Approach to Value http://t.co/XiZOUMOn Features investors Vitaliy Katzenelson & Croft-Leominster, & smaller Frank Voisin & me Mar 28, 2012
GoodHaven Realizes Its Vision http://t.co/zJVmCFMa The CIO of Markel, Tom Gayner showed them favor and invested with them. Good for them. $$ Mar 27, 2012
What This Industry Needs is a Good Disruption http://t.co/imKDcElR There r a few areas of the financial industry that justify their fees $$ Mar 27, 2012
Found PDF slide presentation: http://t.co/0GfhME7m The Market for Financial Advice: An Audit Study $$ Worth a read, paper not free @ SSRN Mar 26, 2012
Treasuries Rise for Fourth Day on Global Growth Concern http://t.co/JYpanHTu Funny how the sentiment has reversed; who is surprised? $$ Mar 25, 2012

Monetary Policy

@kyles09 No, not a believer in MMT, MMR, or neoclassical macro. 2 much aggregation, not everything happens at once, goods/services central + Mar 30, 2012
@kyles09 and $$ only facilitates goods/services. Debt is important, but not central, some goods owned outright, w/no liabs. Money is a + Mar 30, 2012
@kyles09 creation of a culture, not the government, because @ the edges, FX & commodities will crowd out bad currencies. MMT -> inflation $$ Mar 30, 2012
What Does Bernanke Know? http://t.co/LydpOqk1 Introduces “The Guy Rate” http://t.co/zNVeUYmP Unemployment of older guys has hi costs Mar 29, 2012
Demand for U.S. Debt Is Not Limitless http://t.co/NWKHcpCD In 2011, the Fed purchased 61% of Treasury issuance. That can’t last. $$ Mar 29, 2012
Bitter Money Fights Shaped U.S History http://t.co/36jWnkQq Abandoning Gold Helped Dollar Gain Preeminence http://t.co/QbYMkTNL $$ Mar 28, 2012
For the last tweet, those r2 good articles by Simon Johnson & James Kwak, authors of ?13 Bankers? & co-founders of The Baseline Scenario $$ Mar 28, 2012
Housing bubbles and interest rates http://t.co/9TfzMpt2 Makes my point that asset price levels should be part of monetary policy $$ Mar 31, 2012

Banking & Finance

FiveBooks Interviews > @Ritholtz on Causes of the Financial Crisis http://t.co/RQQZfHTz Many good perspectives from 6 authors on the crisis Mar 31, 2012
Geithner?s Math Puzzle Beyond Numbers for DeMarco http://t.co/Eg9BjcgE Principal forgiveness would have moral hazard impacts. $$ Mar 30, 2012
Why not make LIBOR off of binding offers of the banks to borrow/lend to any of their group $10M short-term unsecured? Avg — LIBOR/LIBID $$ Mar 30, 2012
Libor Links Deleted as UK Bank Group Backs Away From Rate http://t.co/HOy8TOof British Bankers? Association distances itself from LIBOR $$ Mar 30, 2012
Branson?s Virgin Money Seen Disrupting U.K. Retail Banks http://t.co/bPcD8im7 Always been a Branson skeptic; he have audited financials? Mar 30, 2012
Why not make LIBOR off of binding bids/offers of the banks to borrow/lend to any of their group 10 million dollars sh? http://t.co/wK3HyopV Mar 29, 2012
Is Hartford Financial’s market exit a death knell for the annuity crowd or just more Hartford haplessness? http://t.co/AUEVqxWQ Both. $$ Mar 29, 2012
The Birth (and Death) of the Moral Age of Wall Street http://t.co/eStszd7i At one point the moral code of $GS had some meaning, not much now Mar 29, 2012
@BarbarianCap More subtle than that; for insurance accounting &the concept of release from risk, it is the conservative side of realistic $$ Mar 27, 2012
A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market http://t.co/WYQGAVVx +1 $$ Mar 26, 2012
But, disagree. Would b simpler and more effective to disallow repo financiers unrestricted access to collateral even in counterparty default Mar 26, 2012
Obama Relies on Debt Collectors Profiting From Student Loan Woe http://t.co/pYWwgLq2 How independent debt collectors get people 2 pay $$ Mar 26, 2012
A Bailout by Another Name http://nyti.ms/GRTNMM GSE writedowns would constitute a direct & sizable gift from taxpayers 2 the largest banks Mar 26, 2012
Banks? preemptive strike against Dodd-Frank http://t.co/wjHW0nyv Banks adjusting strategies in order to keep doing as much biz as possible Mar 26, 2012
MF?s Corzine Ordered Funds Moved to JP Morgan, Memo Says http://t.co/cYaT9sHy The most likely cause may prove to b correct $$ #corzine Mar 26, 2012
BOE’s Tucker: Rehypothecation Consequences ‘Under the Radar’ http://t.co/0X8ZQMMH Good. Rehypothecation should b reviewed, perhaps limited Mar 26, 2012
@EpicureanDeal @dsquareddigest I would still lay the blame @ the door of $GS mgmt. Could have grown via retained earnings &stayed private $$ Mar 26, 2012
@EpicureanDeal @dsquareddigest Also, there r real advantages 2 partnership culture in an investment bank; risk control works a lot better $$ Mar 26, 2012
The Age of the Shadow Bank Run http://t.co/deJRQGgy Borrow short, lend long; clip a spread. Surprise! During the crisis you lose big! $$ Mar 25, 2012
The Interest Rate Swaps that Are Bankrupting Local Governments http://t.co/yHQZ1r3u Not true. Gov’ts tried to minimize taxes w/swaps, failed Mar 25, 2012
Three?s a Crowd http://t.co/KHtbrqpe Disagree w/the conclusion, because $GS did not have to go public; problem is mgmt, not shareholders $$ Mar 25, 2012

Pensions

Brazil?s pension system http://t.co/90O97tQ4 They allow people to retire too early & offer too much. More unsustainable than Medicare $$ Mar 30, 2012
@AlexRubalcava Perhaps a cash balance plan would do that. DB plans are not expensive because of explicit costs. They r expensive b/c + Mar 28, 2012
@AlexRubalcava during boom times benefits look free and get set too high, leading to high costs in the bust phase & plan terminations. $$ Mar 28, 2012

Politics

Obama Is a Loser Who Wins, Like FDR in 1936 http://t.co/K0x9go0T Don’t assume a bad economy insures the defeat of Obama. FDR won in ’36 $$ Mar 31, 2012
The Rejection of Austerity Begins http://t.co/CgWKa9x6 Until failure, ppl vote 4 politicians who promise magic prosperity thru govt fiat $$ Mar 30, 2012
Germany: The Final Frontier… Whose True Debt/GDP Is Now 140% http://t.co/KgW2d76E When you add up the guarantees, doesn’t look so good. $$ Mar 29, 2012
Justices Suggest Parts of Health-Care Law May Be Thrown Out http://t.co/cMvKHR20 B best 2 throw the whole law out; let Congress start over Mar 29, 2012
Contra: Court Can?t Let Broccoli Get in Way of Health Care Law http://t.co/5Yp2o8tB Sup Ct is moving 2 define interstate commerce better Mar 26, 2012
Death Tax Defying http://t.co/FrkL5yLB Eliminate the estate tax; Tax everyone on unrealized capital gains. $$ Same result. Mar 25, 2012
Intelligence community can keep data on Americans with no ties to terrorism for up to 5 years http://t.co/PCM7ldiG Stinks; call the ACLU $$ Mar 25, 2012

US Economy

Why Natural-Gas Prices Could Fade to Red http://t.co/GApb0xie When everyone tries 2 frack @ once, there is too much natgas, price falls Mar 30, 2012
US coal production declines as industry faces further stress http://t.co/l3WpZtDC Fracking has unpredictable consequences; affects energy $$ Mar 29, 2012
Bidding Wars Erupt as U.S. Supply of Homes for Sale Falls http://t.co/JsgIdewr In certain locales, & on the low end, there r bidding wars Mar 29, 2012
The Biggest Bellwether In The World Is Giving Some Ominous Comments About Growth http://t.co/vHWs9lwB $FDX says things r slowing down $$ Mar 29, 2012
Planned Pipelines to Rival Keystone XL http://t.co/qQZ1Dsj2 Enterprise Products Partners & Enbridge may build competing pipelines $$ Mar 28, 2012
‘Pink slime’ producer suspends operations http://t.co/CvptYPhU Goes from 4 factories to 1. 600 people will probably lose their jobs $$ Mar 28, 2012
@valuewalk @The_Analyst It is better for students to start small businesses. Forget economics, it is a waste. Profit/loss best teacher $$ Mar 27, 2012
The Economic Surprise Index is now trending down http://t.co/eJCEEdvy @soberlook reminds us that not everything is going well $$ Mar 27, 2012

Miscellaneous

Like it? I’ve actually bought cars that way! RT @mprobertson: http://t.co/UHdFL0Eu How to buy a car using game theory. very interesting. $$ Mar 31, 2012
Eating Chocolate Regularly May Make You Leaner, Survey Suggests http://t.co/l8c6MMpA This means one dark chocolate Dove promise/day $$ Mar 27, 2012
The second most dangerous people in the world are smart people with wrong postulates. Mar 25, 2012
The most dangerous people in the world are politicians who peddle the views of the smart people with wrong postulates. $$ Mar 25, 2012
Madoff FBI Files Reveal How He Fooled His Own Employees http://t.co/lmq2AoZG Gives hope to those accused; Madoff controlled data tightly. Mar 25, 2012

An Advanced Penny Stock Scam

Posted on 15 March 201215 March 2012 by David Merkel

Don’t buy what someone wants to sell you.? Buy what you have researched, and know that it is what you want to buy, because it is valuable.

I have an irregular series on penny stocks, largely off of advertisements mailed to me, or things found on the web.? Every promoted penny stock I have run into has done badly.

Now for all of my prior penny stocks that I have been written about, all have done horribly.

Today’s gem is iTrackr [IRYS], which the advertiser says is the “Groupon Killer,” complete with a cover page that has a dinosaur labeled “Groupon,” being hit by meteors labeled “iTrackr” and “IRYS.”? Now, this time I got a full 16-page shiny brochure, which had quotes on iTrackr from two notable publications, but in 2006 & 2007, long before Groupon was prominent… and iTrackr did not gain in profitability since then, rather, it had larger and larger losses.

In five-point (or so) type, near the back of the brochure, there is the disclaimer.? I scan it with OCR so that you can read it at a normal size:

Disclaimer:

The xxx Newsletter and/or its publisher, Author Inc., dba blablabla.com did not receive any direct compensation (other than future subscription revenues, the amount of which is not known at this time) with respect to the publication of this Advertisement. Author Inc. has received ten thousand dollars in cash compensation to assist in the writing of this advertisement. BHB Marketing paid eight hundred thousand dollars to marketing vendors to pay for all the costs of creating and distributing this report, including printing and postage, in an effort to build investor awareness. BHB Marketing was paid by non- affiliate shareholders who intend to sell their shares.

?This publication does not provide an analysis of a company’s financial position. iTrackr Systems, Inc.’s financial position and all other information regarding iTrackr Systems, Inc. should be verified with the company. Information about many publicly traded companies and other investor resources can be found at the Securities and Exchange Commission’s website at www.sec.gov. Investing in securities is speculative and carries risk. It is recommended that any investment in any security should be made only after consulting with your investment advisor and only after reviewing all publicly available information, including the financial statements of the company. This mailing piece is not intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy securities, nor should it be construed as the provision of any investment-related advice or services tailored to any particular individual’s financial situation or investment objective(s). The xxx Newsletter is a bona fide publication of general and regular circulation offering impersonalized investment-related research to readers and/or prospective readers and is not an investment adviser. As such, it relies upon the “publisher’s exclusion” as provided under Section 202(a) (11) of the Investment Advisers Act of 1940 and corresponding state securities laws. The xxx Newsletter is not a registered broker dealer. Staff members of The xxx Newsletter and its affiliates may hold positions in investments mentioned herein, and may buy or sell their interests on the open market at anytime. The xxx Newsletter presents information in this report believed to be reliable, but its accuracy cannot be guaranteed. Additionally, it includes forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding expected growth of the featured company. Any statements that express or involve discussions with respect to predictions, expectation, beliefs, plans, projections, objectives, goods, assumptions or future events or performance may be forward-looking statements. The forward-looking statements contained herein (which include all statements other than historical information) involve significant uncertainties. Factors that could cause actual results to differ from the results or implied in forward-looking statements include the size and growth of the market for the Company’s products, the Company’s ability to fund its capital requirements in the near term and in the long term, pricing pressures for the Company’s products and services, the Company’s ability to obtain needed resources, and the local, regional and global markets. Forward-looking statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks and uncertainties that could cause actual results or events to differ materially from those presently anticipated. Past performance does not guarantee future results.

Emphasis mine. I wanted to split and highlight the juicy stuff.

Now, let’s think about the math of the scam: they pay the author $10,000 to sell his limited credibility to pump a penny stock.? They put $800,000 into the production and mailing of the glossy brochure.? But the market cap of the company is only $6.7 million.? They think the advertisement will create a lasting 12%+ rise in the stock that they can sell into.? Pump-and-dump.? Proclaim a biased story in big print; offer retractions in small print.

No surprise to me, this company has negative earnings (which are getting worse) and a growing negative tangible net worth.? For fun let’s look at the risk disclosures from the 10-K:

Because there is doubt about our ability to continue as a going concern, an investor may lose all of his investment in our company.? [Oh yeah, the auditors don’t believe in us.]

iTrackr has a history of losses and may not be able to generate sufficient net revenue from its business in the future to achieve or sustain profitability.

iTrackr?s cash on hand and anticipated near term sales may be insufficient to fund operations for the next 12 months.

If iTrackr is unable to fund its operations and capital expenditures, iTrackr may not be able to continue to develop and market its products and services which would have a material adverse effect on its business.

iTrackr is dependent upon key personnel whose loss may adversely impact iTrackr?s business.

iTrackr?s management systems and personnel may not be sufficient to effectively manage its growth.

If we are not competitive in the market for online sales, marketing and customer service solutions, or online consumer services our business could be harmed.

We are dependent on technology systems and third-party content that are beyond our control.

Our services are subject to payment-related risks.

We may be liable if third parties misappropriate personal information belonging to our clients? Internet users.

Our products and services may infringe upon intellectual property rights of third parties and any infringement could require us to incur substantial costs and may distract our management.

Technological or other defects could disrupt or negatively impact our services, which could harm our business and reputation.

Our promotion and marketing of our websites may not result in generation of significant revenue which may cause our business to fail.

Unauthorized disclosure of sensitive or confidential client and customer data, whether through breach of our computer systems or otherwise, could expose us to protracted and costly litigation and cause us to lose clients which may result in our going out of business and for you to lose your investment.

Competition in the social networking, online marketing and e-commerce industry is intense and our competitors have greater financial resources and development capabilities than we have, and we may not have the resources necessary to successfully compete with them.

Our services may become obsolete and unmarketable if we are unable to respond adequately to rapidly changing technology and customer demands.

The loss of our executive officers or directors, could adversely affect our business.

Our Controls and Procedures may not prevent misstatements.

Our Financial Statements for the year ended December 31, 2009 and the quarterly periods ended March 31, 2010 and June 30, 2010 were Restated as a Result of a Re-Audit by our New Independent Accountant Which was Necessitated Due to Revocation of our Former Auditor?s Public Company Accounting Oversight Board (?PCAOB?) Registration.

There will be a substantial number of shares of iTrackr?s common stock available for sale in the future that may be dilutive to its current stockholders and may cause a decrease in the market price of its common stock.

Our common stock is considered ?a penny stock? and may be difficult to sell.

iTrackr may be unable to receive a listing of its securities on NASDAQ or another national securities exchange, and this may make it more difficult for its stockholders to sell their securities.

One stockholder owns a majority of our common stock and may act, or prevent certain types of corporate actions, to the detriment of other stockholders.

If we issue additional shares of common stock in the future this may result in dilution to our existing stockholders.

There is currently no market for trading our common stock, and when such a market does develop, the trading price of our common stock may be volatile, with the result that an investor may not be able to sell any shares acquired at a price equal to or greater than the price paid by the investor.

The trading price of iTrackr?s common stock is likely to be volatile, and you might not be able to sell your shares at or above the public offering price.

The concentration of iTrackr?s capital stock ownership with insiders will likely limit your ability to influence corporate matters.

The Company does not expect to pay any cash dividends for the foreseeable future.

Not too optimistic, as you can see, and one looking through the financials would note that they are running out of cash.

Do the large holders think that they will dupe enough people to buy their shares from them, and at advantageous prices?? Hmm… maybe any price above zero is an advantageous price.? As with many promoted penny stocks, it usually looks like a future zero.

Even if the scam is legal, I don’t get how the math works.? They really think they will get a sustained 12%+ rise in the stock, adequate to turn over the entire capitalization of the company into the hand of suckers?

Which makes this double-dumb.? When even the scammers don’t make money, it is one really dumb scam.

Main lesson: don’t buy promoted stocks, and particularly not penny stocks.

PS — Why did the advisor decide to write this?? Was he that desperate for money?? If I were one who bought newsletters, I would not be impressed with the lousy analysis here.