When Options Media Group Holdings, Inc. (OPMG) announced a deal the other day with Justin Bieber, several news outlets were quick to applaud the message of “no texting while driving”, but they failed to look into the details of the deal.
I take great pride in exposing penny stock pumps, especially when celebrities receive millions of shares in compensation to back the too-good-to-be-true products, so investors and traders can learn EXACTLY why penny stocks are so predictable (contrary to what most people believe), but it’s sad when a hot upcoming brand like Justin Bieber gets involved.
No different from when I exposed Shaquille O’Neal’s penny stock pump on a company claiming they made the next “Splenda” (they eventually failed but Shaq sent me a cease and desist letter anyway in which his lawyers couldn’t properly spell the word egregious (Tip to wannabe lawyers: there are no As) and his deal with the company became worthless as the stock dropped from over $3/share to its current price of just 8 cents/share, his 2nd straight deal as company spokesperson to lose 99% of its value)
Now it’s Justin Bieber’s turn to learn about partnering with questionable penny stocks.
So to Bieber and clan I say: research a company IN DEPTH before you partner with them and become a 16% owner…oh yes, Justin Bieber was given 121 million shares at roughly a penny per share, not to mention he will earn royalties on every piece of software he sells in exchange for his promotion which could mean a few million more.
And like Shaq’s pump, Bieber’s pump’s “product” has been on the market for a while now…with terrible results…sales dropped 48% year-over-year compared to the 60% year-over-drop in sales of the product Shaq was pitching.
But while Shaq’s pump involved a multi-million dollar email promotional campaign using his image to spike the stock price, this Bieber deal so far has only included press releases and propaganda blog posts by a penny stock promoter.
(yup, all in the last 48 hours)
Scroll down to the bottom of that press release and the blog posts and you’ll find they were written by Emerging Growth Research, LLC, a third-rate penny stock promoter whose disclaimer says in very fine print that they were given 4 million shares of OPMG stock.
And this is the main problem with OPMG…sure, sure, they’re on the brink of bankruptcy (or they were B.B. (Before Bieber), their product is questionable, they’re based in Boca Raton (US home of questionable companies) and it seems no different than the Shaq pump, but there are SO many people with millions of shares to sell as this company has done over 50+ financings the past 2 years that it’s gonna be pretty difficult for the stock to ever skyrocket as all those insiders will sell on any price increase.
Currently, thanks to Bieber’s stake there are just under 500 million shares outstanding so, at 3 cents/share, it’s roughly a $15 million company, but when their many preferred stock deals come due, there will be closer to 750 million shares outstanding…and given that they need money badly, I wouldn’t be surprised to see over 1 billion shares outstanding soon, in the exact same vein as the blatant pump Spongetech Delivery Systems, Inc. (SPNGQ), which is currently at 0.0006 cents/share and insiders have just plead guilty to perjury.
(that pump claimed they were gonna sue me for a “short & distort” scheme due to articles by a NY Post Reporter and myself (although I actually never talked or emailed with Kaja Whitehouse and SpongeTech never served me…perhaps distracted by their executives being on trial for all sorts of crimes)
OK enough blabbering, let’s get down to the business “fundamentals” of Options Media Group Holdings, Inc. (OPMG) thanks to their latest SEC filing
-Enough cash to last for roughly 45 days more (June 30th, 2011)
-Over 50 financing deals in the last 2 years to stay afloat (Guess who will be the first people to sell into this pump as their shares become unrestricted?)
-Just $97,000 in cash in the bank
-Annual sales dropped from $1.6 million to roughly $800,000 last year
-Annual losses of $10 million
-Trying to borrow $5 million to stay afloat
So the numbers are pretty bad, but that can be said about any penny stock, right? It gets worse: Options Media Group doesn’t even own the DriveSafe technology, they simply license it through as company called CSI which then licenses it from recent IPO NetQin Mobile Inc (NQ) in a deal signed last April
So if somehow you believe in “the technology” and the movement that Bieber will undoubtedly try to make this become, the firm that actually makes the software would be more of an investment than OPMG…although NQ’s IPO bombed due to some fraudulent practices accusations which led to many operators dropping NQ’s software from their systems
In addition, the DriveSafe technology is not new as The Wall Street Journal highlighted nearly half a dozen competitors 2 years ago, all of which are better funded than OPMG, one of which just raised $1 million a few weeks ago (and unlike OPMG that company doesn’t owe their management hundreds of thousands of dollars in salary so the $1 million raised can go directly to the product and marketing)
Remember much ado was made about rapper 50 Cent using Twitter to promote a penny stock in which he owned 7.5 million shares, but young Justin owns 121 million shares of OPMG!
He’s already posted to his 27 million fans on Facebook and the stock has quadrupled from 1 to 4 cents/share, a nice $3+ million increase in Bieber’s stake in the company and he didn’t even include the ticker symbol or tweet to his nearly 10 million Twitter followers…yet.
And it’s important to note, OPMG didn’t spike on the initial Bieber SEC filing or even the press release, the big surge came mid-day at 1PM EST, usually signs of an email blast going out…perhaps by the compensated stock promoter? Just guessing…
Long story short, with the stock trading at roughly 3 cents/share, down already from its 4 cents/share highs (with nearly 200 million shares traded over the past 2 days, someone’s selling biiiiiiiiig), I have NO position as it’s not a great risk/reward to shorting here so I hope OPMG and the Bieber clan hire some real stock promoters like NXTH, Shaq & SpongeTech did and if they do – perhaps around the conference call they’re hyping on May 25th — I might even BUY any breakout as there are far more idiots in this world (read: teen girls and those close to them) than those who will read this blog post or understand what a pump is (contrary to most penny stock traders’ beliefs, the movie Boiler Room BOMBED.)
That said I HAD to expose this joke of a company, to help the many thousands of bagholders who are too incompetent and illiterate to do this kind of research, inevitably putting their meager life savings into this “Justin Bieber stock”.