Biozoom, Inc. (OTCBB:BIZM) Slows Down Its Climb Despite Greater Promotion
Last week we saw the stock of Biozoom, Inc. (OTCBB:BIZM) nearly double in price. It jumped from $1.8 on Monday to $3.20 come Friday’s close. It wasn’t smooth sailing all the way though as the stock suffered a mid-week slump when it fell 6% down on the massive for these price levels volume of 10 million traded shares. After the drop the ticker managed to recover albeit on a more calmer trading with only 5% gained at the last market day.
Still the current $3.20 price per share is way too optimistic for a company that at the start of the year was nothing but a shell with the following financials:
- no assets
- $15 thousand liabilities
- no revenues
- $80 thousand net loss
The company was elevated to such heights by a mix of widespread promotional campaign and PR articles. BIZM were picked by Global Investor Research, LLP and announced as one the top 3 stocks for 2013. Not only that, but the stock was issued the extremely high price target of $10.30. Despite disclosing no compensation or shares paid for their services the promotional efforts put forth are considerable – landing pages, report in excess of 20 pages and more, distribution of hard mailers. The latest attempt is a radio ad supposedly run over and over again during the Rush Limbaugh show.
Some serious investments of funds must have been made in order to pay for all of this. For example the promotion that ran for Lot 78, Inc. (OTCMKTS:LOTED), which used some of the same techniques in raising awareness, had a budget of nearly $2.5 million. It managed to lift the ticker to the disproportionate levels of $23 per share. LOTED tried to postpone the inevitable crash by doing a forward split that brought the price down to $6 but reality finally caught up to them and they are down more than 70%.
The promotion is just one of the characteristics for a pump scheme. Even more revealing is the issuance history of common stock. Back in 2007 they sold 1,2 million shares for $5100 to founders and another 610 thousand to private investors. Then comes the 33-for-1 forward split and now these people hold 39 million and 20.1 million shares, respectively and are ready for active trading.
Between BIZM and iTalk, Inc. (OTCBB:TALK) there are some striking similarities. The start was the same – 700 thousand common shares sold to unnamed third parties for $35 000 in 2007, which became 17.5 million shares after a 25-for-1 forward split in December 2012. Add to mix the paid pump that brought TALK as high as $2 and suddenly those shares were worth more than $30 million before the ticker crashed. Even at yesterday’s levels of $0.79 they would still amount to $13.8 million.
BIZM may begin correcting at any time as investors will likely start to cash in their holdings. The promotion is still going on and Biozoom will feed the hype around their product with fluff news for as long as they can.