Arch Therepeutics, Inc. (OTCBB:ARTH) Won’t Live Up to Promises
Arch Therepeutics, Inc. (OTCBB:ARTH) seems reluctant to fulfill the predictions of pumpers. The company was supposed to be heading toward $20 in the long term, yet in the past week all it managed was to wipe out almost half its value, to reach 71 cents per share. Not even a new promotional email on Tuesday could manage to stem the outflow of investors. The company retreated by around 3%, and trading volumes reached $1.7 million.
The relatively expensive campaign, worth $240,500, with 15 emails in July, seems to have the reverse effect. What is even stranger is that ARTH is being touted in a glossy paper mailer, hitting mail boxes since the beginning of the month. Still, the efforts to pump this ticker are a bit over the top, and the panicked selling of positions in the past days indicates that investors smelled a rat.
The promise for $20 ominously recalls the story of Lot 78, Inc. (OTCMKTS:LOTE), a small fashion company inflated to high heaven on the tails of a very expensive paper mail campaign. LOTE started trading out of nowhere, indeed broke through $20, but quickly wiped out its value.
ARTH is also presented on a dedicated web page, arthreport.com , containing the electronic version of the glossy advertisement. The company has a big promise, a wonder “bandage” that uses nanomaterials to seal wounds immediately. But let’s see if ARTH is financially equipped to deploy the next wonder in the field of medicine. The company’s reports reveal:
- $52 Cash
- $302 total current assets
- $7,460 total current liabilities
- No revenues
- $4,546 net loss for the latest quarter
This picture does not belong to a serious medical company, with large expenses and a commitment to long and rigorous research. The company is closer to a sensational snake-oil salesman, despite the high talk of nanotechnologies.
Not to mention that any material can be labeled as “nano”, especially glue formulas. And tissue glues are not unknown to medicine. So it is best not to hold your breath as ARTH claims it would force the popular Band-Aid out of commission, as the glossy advert mentions.
The pundit at the helm of the paper mailer and the landing page is Ian Cooper, a well-known name in penny stock circles. For touring ARTH, he was compensated with $10,000 by Advantage Media Group. The total budget for the paper promotion was $390,000 for the paper-based campaign. Other minor pumpers were also paid by Advantage Media Group.
We still don’t know if ARTH will try to make a recovery and hang on for a while more, but the good news is that this overhyped ticker ended its hot period very soon, not managing to take in too many naïve investors. Still, wiping out nearly half its value, ARTH is a risky ticker and it is best to stay away unless you can afford deep cuts.