The advertised to traders as “red hot” IDOI actually caught a lot of investors’ eyes yesterday. With a 30.77% jump, IDOI broke all resistances back to the beginning of April. The 208 million share volume was also noteworthy, bus as it happened on a massive stock promotion, traders should carefully consider for how long the effect can hold.
At least three promoters were involved in the extended coverage for IDOI shares yesterday. According to the disclosure of one of them, an unmentioned third party has paid $40,000 for a one day program, whereby that promoter has shared the proceeds with additional firms to bring in even more buyers to the market.
As a full-fledged marketing strategy requires, the promotion coincided with the latest two press releases of the company, both issued on the same day. The previously announced distribution contract and more European orders for the MagShoeTM could not really shake the market, but yesterday the promotion made the new interview of the company’s President and the “news” that MagShoeTM units have been installed in some major European Airports sound like being able to do it.
In any case, it is highly questionable if IDOI shares have any potential without the promoting support. At the end of last month, it became clear that the company is planning dilution for its shareholders and the latest financial results do not justify the optimistic P/S ratio of 220, which suggests the stock is currently priced 220 times higher than the actual sales the company is making.
Meanwhile, it also worth mentioning that the sales of the MagShoeTM have been rather sporadic over the past year, and in the first half of this year IDOI’s sales dropped off by almost 87% as compared to the sales for the first half of last year.
