It must be a good feeling when you wake up knowing you have about $6 million on paper in a company that’s just startingout. The thing about that kind of money is that it can evaporate rather quickly.
On Friday Nicole Ostoya, CEO and President of BOLDFACE Group, Inc. (OTC:BLBK), saw about half a million go down the drain as BLBK stock dropped 9.09% to $0.50 on volume of approximately 66 thousand shares.
Ms. Ostoya may have more to worry about as BLBK has been announced as the new pick of known pumper Penny Stock Circle (PSC).
The owners the tout newsletter have been paid $35 thousand for a two-day attempt to inflate the price of BLBK. In case someone is wondering should that worry those who own BLBK shares, the reason is simple: paid stock promotions don’t end well.
Here is what happened with the previous stock promoted by PSC. The pumper tried touting TAEC on Aug. 8 and in 3 sessions the price plunged more than 50%.
Another pick, one which has had more time to develop is CQPT. PSC started touting the stock around May 22 and now, a little more than two months later, CQPT is trading more than 90% lower in the double zeroes zone.
There is no guarantee the same thing will happen with BLBK. However, it is a distinct possibility, especially when you consider that BLBK is just starting out and the market cap at the current price is close to $121 million.
The company is aiming at an industry in which the competition is vicious, and it has yet to prove it can survive, let alone actually make money. BLBK has license agreements to use certain trademarks owned by the Kardashians and Mario Lopez, but whether the company manages to cash in on those won’t be clear for a while, as BLBK plans to launch of its initial license in the fall.[BANNER]
Even if BLBK manages to do well on the business side one day, there are quite a lot of warrants to buy shares at $0.25 and $0.50 per share. This alone could be enough to keep the price of the stock of a profitable company down, and as mentioned BLBK is yet to generate any revenue.
The existence of the warrant may also worry those who are familiar with how paid pumps work. It’s possible the people paying for the pump campaign have cheap shares they want to dump at a higher price.
If BLBK follows in the step of the previous PSC pick, Ms. Ostoya may wake up on Friday short $3 million on paper.
