Kaloyan Gadzhev

IDO Security, Inc. (OTC:IDOI) Crushed Prematurely by Civil Action

by Kaloyan Gadzhev July 25, 2012
0IDOI_chart.pngDon't you get mad when you're trying to do get all the streets in a neighbourhood in a monopoly game and you only need one more, and someone else takes it and destroys your plan?

We can only try to imagine how mad the people who had paid for the pump of IDO Security, Inc. (OTC:IDOI, IDOI message board) must have felt yesterday. While the pumpers at Stock Castle were making a ridiculous suggestion that IDOI could reach $2 per share, a press release came through shortly before 10:30 in the morning. It virtually wiped out the artificial price increase from the pump.

A private investor, George Sharp, filed a civil action against three companies including IDOI. The lawsuit is basically for spamming. The news triggered a selling frenzy which resulted in IDOI dropping to pre-pump levels and eventually closing down 51.39% at $0.35. We haven't received any tout mails about IDOI after the announcement of the civil action. 

When the pump started, we tried to warn traders about IDOI being a company which had spent more that 5 years singing the same tune about the same product, all the while amassing gargantuan losses and failing to generate any significant revenues.

98IDOI_logo.pngEven without the lawsuit, IDOI had a lot of baggage. Keeping in mind the 1 for 3000 reverse split from December 2011, the company's history of outrageous dilution and the high volumes traded in the pump, the possibility that IDOI could be diluting its stock again can't be too far from the minds of traders.

In an ideal world yesterday's massacre would be victimless, however, in reality IDOI costed those who actually believed the claims in the pump a lot of money. It may not be much of a consolation, but the lawsuit may have disrupted the plans of the people who paid for the pump and were waiting for a higher price to dump their stock. 

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