Arch Therapeutics Inc (OTCBB:ARTH) Continues Its Ascend Despite The Lack Of News

Arch Therapeutics Inc (OTCBB:ARTH) jumped up by around 20% yesterday when a total of 3 million shares changed hands which means that the trading value exceeds $2 million. That said, ARTH has been featured in the list of the most actively traded penny stocks for about a month now and while the run was impressive enough, we’ve seen the ticker register gains far greater in the past. This means that when we saw the results from yesterday’s session, our instinctive reaction was: “What else is new?”.

Nothing, apparently. ARTH have been keeping eerily quiet for some time now and the only announcements to come from their headquarters were about one of their co-founders, Dr. Rutledge Ellis-Behnke delivering some lectures around different congregations in Europe. Having in mind the commotion caused around the ticker (especially during the last couple of days when they registered no less than five green sessions on the trot) we can’t imagine why ARTH are keeping everything under wraps.

Probably they’re too busy keeping the excitement going around their “side projects”. Dr. Avtar Dhillon, ARTH‘s Chairman of the Board, for example, holds the same position at not one, but two other publicly traded penny stocks – OncoSec Medical Inc (OTCMKTS:ONCS) and Stevia First Corp (OTCMKTS:STVF). STVF seems to be left to its own devices. Their shares have lost around a fifth of their value over the last four months and while we’ve seen the odd press release, the announcements seem to be rather ineffective at moving the price up.

ONCS however, is a different story. There’s been a lot of coverage for them, some exciting new announcements came out and we even read that they have been featured in a TV segment. Trading volumes have been well above the average figures and this encouraged us to write an article about them a week ago. Unfortunately, they’ve lost around 13% since then.

When you check out the charts for both ONCS and STVF, you’ll see that the general direction for their share price is down. Are we surprised? Not really. While both ventures claim to have some really exciting products that will make their shareholders very rich, they haven’t managed to generate even a dime in revenue. With that in mind, what are the chances of ARTH‘s success?

Quite frankly, we have no idea. They have allegedly developed a revolutionary type of polymer-based substance that could seal heavily bleeding wounds in seconds. According to descriptions available on the Internet, it will substantially reduce the risk during invasive surgical procedures which is all well and good, but the real problem is, we’ve absolutely no idea how far they’ve gone with the pre-clinical testing.

The scarcity of information however, shouldn’t be your biggest worry. What you really need to be concerned about is the huge promotional campaign that’s running for ARTH at the moment. Although we knew that it was coming and quite a lot of people were already spreading the word around towards the final week of June, the pumpers waited until July 8 when a landing page for ARTH went live. A couple of days later, we started receiving the first emails and we can see that around that time, the distribution of a glossy brochure containing quite a lot of unfounded optimism started. Did it have an effect?

It certainly did. The ticker exploded on July 8 when the volume was so huge that the trading value exceeded $9.4 million. Another strong session followed and by the end of the second day of pumping, ARTH had reached as much as $1.30 per share. Soon after however, things looked rather more bleak. The ticker needed no more than seven trading sessions (all of them finishing in the red) to lose 65% of its value.

Surprisingly enough, it’s been on its way to recovery for the last couple of days and there hasn’t been a red session in sight. Most probably this is due the delayed distribution of the hard-mailer brochures, but the question that most of you are probably asking is: “How will the whole thing end?”.

We’ve been around stock promotions for long enough and we know that, more often than not, a disaster is almost inevitable. Another reason to be particularly sure about ARTH‘s impending doom is the performance of ONCS and STVF under the pumping pressure. Just like ARTH, the two ventures were in completely different sectors before taking on their current businesses. Just like ARTH, there was a name change and a stock split. And just like ARTH, the artificial hype did give the price a boost. ONCS reached around $2 per share, while STVF ran all the way up to around $3. Now however, they’re standing around $0.27 and $0.33, respectively. Make sure you have this in mind while you’re considering a potential investment in ARTH.