Borislav Tonev

Arch Therapeutics Inc (OTCBB:ARTH) Desperately Trying To Recover

by Borislav Tonev August 19, 2013
12ARTH.pngArch Therapeutics Inc (OTCBB:ARTH, ARTH message board) entered its second month of pumping on August 8 and it's fair to say that things weren't going to plan back then. Somebody had spent more than $1.3 million on a campaign that wasn't proving to be very successful.

Sure, the ticker did register a couple of consecutive green sessions during the first two days of the pump and it did manage to reach its 52-week high of $1.36 on July 11 but after that, it had all been downhill. Somebody had to do something and apparently, Full Service Media LLC, the entity that is managing the promotional budget, decided that the newsletters are the ones who can drag ARTH out of the mud. Trader Central sent us the first email for last week about an hour before the start of August 12's trading session. Since then we have received 29 more alerts from various pumpers and the compensations range from just $1,000 all the way up to $25,000.

As you might imagine, the promoters have been trying to entice traders into buying some ARTH shares with words about buyout opportunities and ground-breaking technology as well as with some rather far-fetched price targets. Some of the newsletters couldn't even be bothered to come up with their own analyses of the company's advantages and they simply copied most of the contents of the landing page instead.

The only problem is, even the emails didn't prove to be extremely successful. Instead of opening last week on a high note, ARTH finished August 12's session with 7% in losses. Tuesday's results were even more depressing - around 1.6 million shares in trading volume and around 18% of the price wiped out. The ticker managed to recover some of the losses on Wednesday and after some hesitation, it finished the week at $0.5049 - pretty much back where it started.

Not the sort of performance that everyone was expecting, but still, right now, most of the people are probably thinking about what's in store for ARTH in the near and not so near future. Well, by the looks of things, the support from the newsletters might be dying away for the time being.

The latest email that we managed to intercept is from Penny St0ck Spy and we received it about an hour before the end of Friday's session. It talks about the great day trade that ARTH had turned out to be and it says that their next alert will be out on Sunday night. The rest of the promoters haven't mentioned the ticker either, which might suggest that they're moving on.

We saw that the message boards were flooded last week by some posters who seemed a bit too optimistic about the ticker but it seems that now they've gone away which means that normal discussion can be resumed. It also means that despite the fact that the landing page is still up and running, the artificial hype will be subdued for the time being. With that in mind, will ARTH manage to stay afloat?

Well, we're starting to get the feeling that investor's confidence seems to be dying out. Take their latest financial report, for example. It came out after the end of August 14's session and it contains the following figures:

  • cash: $476 thousand
  • current assets: $477 thousand
  • current liabilities: $419 thousand
  • no revenue since inception
  • quarterly net loss: $514 thousand

Sure, there's no revenue and the net loss is pretty high, but you have to agree that, when compared to other promoted penny stocks like Wild Craze Inc (OTCBB:WILD) and Interactive Leisure Systems Inc (OTCMKTS:IALS), ARTH's balance sheet does look good.

Normally, when investors see some promising figures in a new report, their interest in the stock grows and that, consequently, gives the price a boost. Yet, in the case of ARTH, they were having none of it and instead of jumping up, the ticker registered another red session during the day after the report came out.

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