Gray Fox Petroleum Corp (OTCBB:GFOX) Slides Below $2
The promotional campaign for Gray Fox Petroleum Corp (OTCBB:GFOX) started almost five months ago and it’s fair to say that investors have been on quite a ride. The ticker was casually hovering around the $1 per share mark when the whole thing started and although it had some problems during the first two months, it has really been flying since January. There are some things to suggest that the pump is coming to an end though.
As you probably know, touting was done primarily through landing pages written by ex-Fox commentator Tobin Smith and through email alerts. The newsletters, however, discontinued their efforts almost two weeks ago. What’s more surprising, without their help, GFOX‘s performance remained relatively steady.
Even though the latest press release hit the wire on December 9, excitement around the market remained quite strong and the ticker succeeded in keeping its head above the $2 per share mark. Until yesterday, that is.
More than 1 million shares changed hands in a matter of just six and a half hours of trading bringing the dollar volume up to around $2.13 million. GFOX opened the day at $2.44 (around 2% above Monday’s close) and started sliding almost immediately. When the closing bell rang, it was sitting at $1.98.
The 17% drop and the huge volumes suggest that a lot of people rushed to the exit and early trading today shows that some more are running for their lives. GFOX opened the session at $1.84 (7% below yesterday’s close) and about forty minutes in, it still hasn’t recovered. But what is the reason for the sudden change in direction?
Apparently, the people standing behind an entity called Fraud Research Institute decided to express their opinions on GFOX in a report which was published on Seeking Alpha. As you can see from the article itself, they’re not big fans of Gray Fox and they list numerous red flags, many of which have been touched upon in our previous coverages.
This is not the first Seeking Alpha article to affect the performance of a promoted penny stock. We’ve seen numerous contributors publish their opinions on other pumped companies like Nevada Gold Corp (OTCMKTS:NVGC), Life Stem Genetics Inc (OTCMKTS:LIFS), Endeavor IP Inc (OTCBB:ENIP), etc. and the effects on the market sentiment are, in most cases, immediate.
The people who write the Seeking Alpha articles (the case of Fraud Research Institute is no exception) often disclose their short position in the featured ticker which, in turn, prompts other investors to accuse them of deliberately pushing the price down in order to profit from the drop. We’ll leave it up to you to decide whether that’s the case or not, but while you’re thinking about it, we might as well take a look at GFOX and see where it could be heading next.
Unfortunately, things are quite grim. The company had quite a lot of red flags around it since day One. The pump alone was never going to be enough to keep the market cap high and the consequences for the people who got a bit carried away might become evident in the coming days.
Of course, there is the possibility of a renewed effort from the pumpers, but even if you do happen to find an alert in your inbox, you should be extremely careful while considering the risks of a potential investment.