Talisman Holdings (PINK:TMHO) added nearly 10% on Tuesday after the company’s subsidiary announced to be well positioned in the U.S. green gardening market. However, the real reason for the increased activity was a paid promotion.
Talisman’s management provided no game changing information in their update. They simply stated the subsidiary AOP Worldwide is trying to enter the fertilizer market with emphasis on organic fertilizers for the U.S. household gardens. Numbers on industry background were also provided, apparently in attempt to justify their own business model.
However, the real cause for a stir on the stock market was a costly promotion run by Stockegg.com. As disclosed in one of their disclaimers, a third party Quantum Consulting Group Inc. paid $75 thousand for one week of stock advertising services.
Share price added nearly 10% under very heavy volume and theoretically broke an important resistance at 0.072. This means follow up could happen based on technical signals, and considering the efforts of promoters will continue to bring in more buyers, it could run up to at least 10 cents, the closest mental resistance point.[BANNER]
Nonetheless, traders should be aware of the possible overvaluation and sudden price collapses that usually follow promoted stocks. Fundamentally, TMHO is not attractive:
- Slightly leveraged balance sheet;
- Miniscule revenues (only $22 thousand generated in first nine months of 2010);
- Net losses amounted to $75 thousand for the same period;
- Heavy stock dilution.
Furthermore, the company doesn’t file with the SEC and all their financial information is published in unregulated unaudited reports.
