Nearly two hundred emails
have hit our inbox since a number of promoters started touting Plandai Biotechnology Inc (OTCMKTS:PLPL
, PLPL message board
) back in March. The records for September alone show that thirty-one alerts worth $102,500 have been sent out.
That's not all. Stock Market Media Group (SMMG) and Goldman Small Cap Research (GSCR) have written what they like to call "sponsored research reports" and they issue articles almost daily that, for some reason, make it to PLPL's Yahoo! Finance profile claiming that the future is brighter than ever. The two firms admit that they get paid to express their optimism with SMMG disclosing a compensation of $1,500 and GSCR declaring that they have received $4 thousand for their report as well as $500 per article.
The effects on the price have been absolutely profound. Back in March, the ticker was happily hovering around the $0.06 per share mark and the miniscule trading volumes suggested that it might never leave this range. When the large-scale pump began, however, the price started moving North. On August 23, it hit its 52-week high of $0.80 and it proved just how effective an awareness campaign can be.
Truth be told, PLPL does look like the perfect venture to get promoted. A flurry of optimistic press releases have explained how revolutionary their technology is and it's quite clear that the pumpers have taken full advantage of this. The interesting business plan is enough of a reason for them to say that PLPL is about to turn not one, but many industries on their heads and the fact that revenue generation has already started just adds up to the excitement.
But let's not get carried away by the promoters' enthusiasm and take a more realistic approach. Indeed, PLPL say that the technology they possess is revolutionary and this might just happen to be the case but the simple fact of the matter is this - they are nowhere near ready to start making money out of it.
We wrote a few articles about them back in May and if you check them out, you'll see that the revenues generated so far are coming from the sale of agricultural products and timber. More worryingly, they are missing deadlines by miles. Older SEC filings suggested that the revolutionary plant extracts will be on sale by the middle of 2013. The more recent ones suggested that they will be commercially available by the Fall of 2013. PLPL have not managed to put together the report for the period that ended on June 30 yet, but one of the pumpers, Stock Market Media Group, say that revenues from the extracts should start coming in during the first quarter of 2014.
Apparently, we weren't the only ones noticing the aforementioned discrepancies and on September 4, a Seeking Alpha contributor called Alan Brochstein published an article listing quite a lot of red flags around the ticker. The following sessions ended in the red, which could suggest that the coverage did affect some of the traders, but the relatively small volumes reveal that the impact was not that great.
When PLPL issue a forward looking press release, however, the effects are quite a bit different as proven by yesterday's session. Just minutes before the opening bell they announced that they have signed a licensing agreement with a Canadian company called Oasix, Inc. PLPL are supposed to receive some cash as part of the deal which is, of course, great news, but we can't help but being just a little bit dubious about the fact that Oasix seems to have no internet presence whatsoever. In fact, the only thing that we could find about a Canadian enterprise by that name is this periodical issued by Alberta's Corporate Registry according to which the enterprise was incorporated less than a year ago.
Even if you decide to ignore this, the missed deadlines and all the red flags outlined in the Seeking Alpha article, you should still keep in mind that someone is splashing out hundreds of thousands of dollars to artificially inflate the price. So far, the effort is proving successful, but only time will tell if and when the bubble will burst.