Arch Therapeutics Inc (OTCBB:ARTH) Taking On Water

06ARTH.pngWhat a horrific way to end the week for Arch Therapeutics Inc (OTCBB:ARTH). The ticker opened Friday’s session at $1.22, a little below Thursday’s close, it went up to $1.26 for a few minutes and then crumbled under the pressure. When the closing bell went off, it was standing at $1.05 and the volume had racked up to 5.4 million shares. A lot of traders were caught off-guard by the scary losses and some of them are now wondering what’s going on.

Well, we all know that penny stocks are extremely volatile. They jump up and come back down often with little warning and with that in mind, you might think that the 15% drop from Friday is only normal, but things are in fact a little bit different and the reason for this is the expensive paid pump currently running for ARTH.

How expensive? Well, the total budget amounts to nearly $3 million and it includes a special landing page, some emails and a hard-mailer brochure which was written by a person called Ian Cooper. This puts the promotion for ARTH in the same league as the pumps for Northumberland Resources Inc (OTCMKTS:NHUR), Petrosonic Energy Inc (OTCMKTS:PSON) and Norstra Energy Inc (OTCMKTS:NORX). NHUR have been showing some signs of revival for the last couple of sessions but they’re still around 87% below the high of around $1.70 reached during the pump. The story is pretty much the same with PSON and it’s safe to say that there’s little hope for a comeback.

As for NORX, well, some traders who decided to play the pump were already looking at around 50% in losses when the SEC stepped in and issued a temporary suspension order. Currently, their shares are traded on the Grey Market and are around 83% cheaper compared to the 52-week high registered on June 6.

All this means that the people who are currently trying to yield some profit from the pump for ARTH are already walking on thin ice and looking at the Friday chart, some cracks might have appeared already.

Apparently, the pumpers aren’t terribly happy with the performance so they called in some reinforcements. Newsletters and are sending in some emails as we speak and, naturally enough, they have received a compensation for their efforts. $12,500 to be precise and they pocketed the same exact amount of money to tout Polar Petroleum Corp (OTCMKTS:POLR) on May 30, just weeks before POLR received their suspension order as well. Bad omen? We’re about to find out, but we still reckon that the risks are mounting.

1ARTH_logo.pngIn the meantime, some people are also asking question about the promotion itself. Normally when the budget is this huge, the campaign lasts for quite a while and it’s aided extensively by optimistic press releases, but so far, we have yet to see any substantial announcements come out of ARTH‘s HQ. This might be causing some panic among traders or it could be some other people selling a large amount of stock and thus depressing the price.

Whichever the case, the fact remains that someone paid nearly $3 million for pumping ARTH and we’re pretty sure that they’ll want to get some of their investment back. That’s why, a crash seems inevitable. When will it occur, though, remains unknown.

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