Given the extraordinary runup in AspenBio Pharma, Inc. (APPY) (notice at no time in the past year has it ever spiked like this):
…and THIS hype-ish article entitled “Is AspenBio Pharma Next To Follow In The Footsteps Of Dendreon and Human Genome Sciences?” which compared it to biotech heavyweights Dendreon Corporation (DNDN) and Human Genome Sciences (HGSI) (which later got infinitely more exposure on Seeking Alpha) and the strangely titled “Takeover Speculation Swarms at AspenBio Pharma” combined with the strangely timed (I’ll explain in a bit) $10 million financing APPY pulled off on Friday, one can’t help but wonder if these 2 articles caused the stock runup which triggered the PIPE financing deal….a hype and PIPE if you will.
No, I’m not saying that anything illegal took place, I shorted 9,000 shares of APPY at $3.95 (see this is how transparency works Vlaicu and Garza) on Friday just because it’s my exact chart pattern as outlined inand (spike caused by fluff news and the first down day just below key support ($4) along with a questionable and definitely dilutive financing (puts a solid ceiling just above where I shorted)
I refuse to debate the science behind APPY as that is rarely useful or predictable, but I will rely on historically rational and accurate Adam Feuerstein of TheStreet.com who talked with APPY management and concluded:
AspenBio has, in the past, reasoned that one value of AppyScore could be the elimination of expensive CT scans from the diagnosis of appendicitis. True, in theory, except that AppyScore works by measuring a marker for inflammation. The test doesn’t specifically screen for appendicitis. This means that most ER docs would likely still use a CT scan to make sure that it’s the appendix and not some other nearby organ, which is in trouble.
AspenBio shares, trading around $4.30, have almost doubled in value in the past two weeks, as the stock attracts the interest of retail investors and traders. Some of the information published about AspenBio on blog sites like Seeking Alpha is incorrect or omits key facts, so I’d be careful.
So let’s assume APPY’s product is junk and the stock is destined to fall, is there a strong enough case that it has been promoted (paid-for stock promotion which ALMOST ALWAYS leads to stock spike failure)?
That is the question, you tell me…below is the bio of the guy, Michael Vlaicu, who wrote the takeover speculation article and whose site featured the comparison to DNDN/HGSI…
A young and savvy, yet experienced and accomplished investments mogul since ‘01; Michael has amassed a fortune as a private self investor. Recently starting his own successful blog and turning it in to a self-proprietorship — StocksHaven Investments, a company offering advice to thousands of people worldwide and attracting contracts from various reputable sources. The financial news portal can be found at www.StocksHaven.com. Michael has reached Expert Stock Analyst status from a variety of accredited publications.
Isn’t it interesting that someone so young has “amassed a fortune”? Nice to say, but is there any proof? His Covestor account is not hooked up to any broker….nor does he list his track record ANYWHERE (as I do as you can see on the right hand side of this page)
Representing all REAL traders who have amassed millions from the market, I am offended by Vlaicu’s claims as all the evidence (his site) means I simply don’t believe him.
Worse yet one of the site’s writers, Jeanne Grecco, works for Gryphon Financial, a firm universally recognized as a “ripoff” and a “scam”….see a basic Google search
Hmmmm, for someone who has “amassed a fortune” as an investor, it is curious to see that one of the services his website provides is IR services, as detailed on their IR contract page: which includes:
Conference Calls – Suited for individual private investors, as well as institutions conducted in a professional manner
Articles – In depth analysis of past, present, and future company products / projects and potential growth outlook
Mass E-Mail Distribution – Prior to articles and PRs, notification of pending profile will be sent to over 10,000+ daily active investors
And cites an example of:
MiV Investments Inc. Investor Relations contract offers a complete set of promotional and marketing services encompassing SEO, Social Media Marketing, Mass Worldwide Press Release Implementation and Reputation Management Services. Our services include:
On July/18/09, TheMarketFinancial.com published an in-depth company financial analysis of Nephros, Inc. entitled, “Nephros (OTC:NEPH): Three FDA Decisions, One Company.” The next day it received coverage as the top news story on:
Seeking Alpha (Mr. Michael Vlaicu is a certified author)
iStockAnalyst (Mr. Michael Vlaicu is a certified author)
Best Way To Invest (Mr. Michael Vlaicu is a certified author)
That post on NEPH was a guest post written by Michael Sklar, a contributor at, where the bullish article on NEPH was also published….strangely, on Seeking Alpha the disclosure says “Disclosure: No Positions” while on both StocksHaven & the disclosure reads “Disclosure: Michael Sklar has a Long-Term Position” and “long”
So while nobody involved says they are being compensated, there is a case of contradictory disclosures and it’s especially questionable that Vlaicu and StocksHaven and MiV Investments Inc. use the NEPH example on their IR contracts page.
NEPH did do a financing within 45 days of that article and several more in 2009 as the stock rose gradually before dropping 70%. That’s just one example, there’s plenty more too…Vlaicu’s website has “picked” many stocks that have been disclaimered as paid promoted stocks on other sites.
On APPY, neither Vlaicu nor MiV Investments Inc. nor StocksHaven say they got compensated in any way, but given the NEPH similarities in chart and financing and the utterly destructive article written by definitely-not-compensated Feuerstein, I gotta believe that APPY will drop 70% form its highs in the coming months…I doubt I’ll stick around that long as NEPH did spike more before the big drop as it’s dangerous to short ahead of FDA news (as penny stock promoters know perfectly well)
To answer the question in this blog post’s title: it’s impossible to know when penny stock promoters cannot be trusted to use proper disclaimers. All I know its that when penny stock promoters get involved with penny stocks up 100%+, especially when as Adam Feuerstein claims, the facts are wrong or omitted (as often happens when it comes to penny stock promoters as whether or not they get compensated on a stock, there has NEVER been a promoter to question ANY penny stock because every penny stock to them is a potential client so it’s not good to make enemies like Sykes does), it’s usually a good time to short for the eventual drop out.