Beware: Labor Smart Inc (OTC:LTNC) Is BlueLys Capital’s New Promotional Victim
Aligning the interests of shareholders, on the one hand, and top managers, on the other, or the so called agency problem is gradually morphing into an increasingly challenging phenomenon these days. That is why, the implementation of employee stock option plans (ESOs) has more or less become a necessity. The guys at Labor Smart Inc (OTC:LTNC) make no exception. However, there is something rotten about their most recent ESOs because they might lie at the root of the newest promotional campaign in favour of the stock.
Shortly after the end of the latest market session yesterday, a slew of emails touting the stock of LTNC started bombarding our database. As it turned out, the promotion is led by none other than BlueLys Capital Inc. through their four subsidiaries, namely Wall Street Report, Penny Stocks VIP, Penny Stocks Guru and Monster Trading Alerts. The latter have received a hefty $150,000 for their services.
Before we go into detail, we would like to lay emphasis on yet another promotion organized by BlueLys Capital Inc. The pump job in question, which by the way commenced on March 26, was aimed at boosting the share price of Mobile Integrated Systems Inc (PINK:MIBI). While the campaign provided a maximal profit opportunity of approx. 40% on day one, the stock quickly lost momentum.By the end of the March 27 session, MIBI shares lost a whopping 34% from the daily high registered on the previous day, leaving a lot of naive traders with empty-handed. The next paragraph tells you why LTNC could follow the fate of MIBI so we suggest that you read on.
Needless to say, paid pumps are usually organized for a purpose. The most recent developments around Labor Smart Inc suggest that this promotion was king of expected. As it is, the company’s Board of Directors just got bigger with the appointment of Mr. Matthew Rodgers and Ms. Shannan Manix on Feb. 21 and Mar. 8, respectively. So far, so good. However, each member got a supplementary bonus – an option to buy 50,000 shares of common LTNC stock at conversion prices of approximately $0.60 per share. Rodgers was even given the right for a cashless exercise. To put it simply, both Rodgers and Manix got a chance to buy LTNC shares at around $0.60 and realize some nice gains by taking full advantage of a potential spike in the market price of LTNC stock. Oddly enough, BlueLys’s pump job on LTNC is exactly aimed at ramping up the market value of the stock. Should the effort prove successful, nothing could prevent BoD members Rodgers and Manix (and any other major stakeholders) from shorting their stakes at high tide.
The bad news for all other traders is that once the shorting is over, there will be no more buyers left to keep the stock from crashing down. By contrast, the good news is that you can avoid being sucked into the void by giving this stock a miss today.
