It's Friday 13 today and the people who didn't manage to get out of Makism 3D Corp (OTCBB:MDDD
, MDDD message board
) on time should know this. Especially now that their stock has been suspended by the Securities and Exchange Commission
After two weeks of pumping through emails, landing pages and hard mailer brochures, around $40 million in total dollar volume, and quite a lot of broken dreams it's finally over. We covered the pump extensively and we saw how quite a lot of people lost a ridiculous amount of money during the two 40% drops from last week. Some more investments were incinerated yesterday when MDDD burned through around 30% of its value, but unfortunately, the really painful losses are yet to come.
As you probably know, the SEC has really been tightening the grip around penny stock promotions in the recent weeks and no less than four pumped tickers (Sovereign Lithium Inc (OTCMKTS:SLCO), Life Stem Genetics Inc (OTCMKTS:LIFS), Nevada Gold Corp (OTCMKTS:NVGC) and Guar Global Ltd (OTCMKTS:GGBL)) received their orders before it was finally turn for MDDD's halt.
Last week, we tried to warn our readers that a potential intervention from the SEC is possible and we're even a little surprised by the fact that the Commission let the pump run for so long. An earlier suspension would have certainly saved inexperienced investors some money. Traders who were caught off-guard are now probably wondering what's going to happen next and we'll do our best to give them an answer.
The suspension is temporary and trading should resume on December 27. Unfortunately, once it does, MDDD will be listed on the Grey Market which doesn't bode too well for the company credibility. The skulls and crossbones will also be present on the profile at the OTC Markets and while traders showed last week that they don't seem too upset about it, they will probably be quite angry about another thing - the share price.
The orders for LIFS and SLCO expired recently and their shares are now tradeable once more. As you can see from the charts on the right, however, the value has dropped by quite a bit. And since the Grey Market can't offer you a Level 2 quotation system, buying and selling stock will be a bit like shooting in the dark. On the whole, we can say that the lowest tier of the OTC Markets is often referred to as "the graveyard for penny stocks" for a good reason.
But what about the company itself? Surely, if the product is there, they should see some growth. They could even convince the regulatory organs that the enterprise is solid and might just manage to get back to the upper tiers of the stock exchange. What are the chances of this happening?
Well, we won't be surprised if the management team issues a press release in the coming days saying that they have nothing to do with the pump just like they did when the ticker received its Caveat Emptor badge. It's up to you to decide whether you should trust them or not, but, as we mentioned numerous times already, even if they do have an idea of actually coming up with a revolutionary 3D printer, they simply don't have the money to realize their dreams. Now that the stock has been the target of such a disastrous pump, raising additional funds will be even more difficult which means that an investment must be well thought through.
Hopefully, the abrupt end to MDDD's pump will serve as proof of how dangerous penny stock promotions can be and will help traders understand that if something sounds too good to be true, it most likely is.