PositiveID Corp. (OTCMKTS:PSID) Headed Up Again

PositiveID Corp. (OTCMKTS:PSID) had an abrupt and dramatic crash after its Oct. 10 surge, but the slide seems to have ended on Wednesday, with yesterday’s session bringing another 25.30% share price rise on a dollar volume of 1.35 million.

This latest jump is, at least in part, due to PSID‘s continued efforts to keep investors hyped about its flagship product – the Firefly Dx pathogen detection system. Indeed, one look at charts of other Ebola-related companies is enough to ascertain that the is hype in its peak, and the company sure seems to be doing its best to exploit the attention. With this in mind, it really isn’t all that surprising that PSID has been so wildly successful in doing so. The real question here is – do investors really have all that much reason to be excited about the company?

True, PSID has announced that it has developed a technology that could prove to be the key to detecting and effectively combating many deadly pathogens. However, the Ebola hype has made PSID hot now, while according to the statements given in the interview, said testing system is to be released in about a year. Which basically tells us that until said release happens, the company won’t really have much to keep it going, apart from hype and hope.

As demonstrated by the marijuana rush that gripped the market around the beginning of 2014, exploiting hype can lauch a ticker a long way up, but hype can only be exploited as long as a company can draw attention. This means that PSID will probably need to keep pumping out good news in order to keep the investors interested and thus keep its share prices up.

So what could happen when the company inevitably fails to deliver on that account? Or if, for instance, PSID is forced to disclose bad news? Developments that are not exactly favorable to investors inevitably crop up. The company’s latest toxic funding 8-K that hit the web after the Oct. 10 trading session is a perfect example of such an event. What could happen then?

One look at the company’s Oct. 13 charts gives a clear enough answer to that question.

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