the OTC .today

Another S-AURI Pump & Dump Story

August 4, 2011:  We love today's upteenth promotional email from tout Eastwind Research who is trying desperately to pump Auri, Inc. (AURI):
 "A few weeks ago, we brought you AURI.  We love AURI and now we are bringing you back in for what we think is about to be a MAJOR RUN"
A few weeks ago?  Really?  How about thirteen days ago.  Back then Eastwind's dare was:
"Get into AURI before the action begins"
"So, in the end, you have a choice...miss AURI at right around 65 cents or...

You can bet against against what The Wall Street Journal and USA Today...
bet against Forbes Magazine, The Washington Post, PARADE and The Wall Street against AURI Inc."
One of the sure signs of a pump and dump is when you are told, "You must get in now".

Much to the chagrin of the insiders and the touts, the public wisely decided to bet against the dare.  Why?  Because Eastwind and the other touts laid it on too thick.  Few people are going to be stupid enough to believe that all these world class periodicals are going to tout a penny stock.  They didn't.  Just because Parade magazine put AURI shoes on their cover (and we're not sure they weren't paid to do so), doesn't mean that they endorse AURI's stock or even believe that AURI will survive.  It just means that AURI makes nice shoes.  Well we believe that!  The shoes are great!  It's the stock that sucks!  Koo Koo Roo made great chicken but couldn't make any money.  Saab made great cars but no money. And so on....

The problem is that AURI is an over hyped, over priced, underfunded, under performing company.  So what do the touts do?   They arbitrarily compare AURI to Apple, Inc.  How much credibility can be given to a tout stupid enough to mention these two companies in the same breath?

The street has stayed away from AURI in droves.  In the last two weeks, at least 16 emails from at least 4 different touts have filled the inboxes of emails addresses everywhere.  And all the volume the stock could muster in the period was an anemic 2.9 million shares.  And guess what!  The stock is still 65 cents.  It's been stuck in a range between 60 and 70 cents and we think it is about to get dumped big time.  Why?  Because the shareholders will soon get spooked when they see that pump after pump has failed to get the share price up.  And then the insiders are likely to lose patience and look to cash in.  They are spending a lot of money on pumping the stock and not getting enough return.  So as is usually the case, they'll discount the stock to extract their funds.  "Don't want it at 60 cents?  Ok, how about 40?"  We've seen it time and time again.

Let's look at a couple of the outrageous claims by the touts.  The favorite boast refers to Forbes magazine's highlighting of AURI as a "most promising company".  That was two years ago.  Two years ago, Nokia had 40% of the world's smart phone market.  This year they're unlikely to take 20% and are expect to soon disappear.  Two years ago is a long time ago in the business world.  And AURI has not lived up to its hype as a most-promising company.  In fact, that Forbes article of 2009 is trumped, albeit unintentionally, by a later Forbes article called, "10 Ways To Spot A Pump and Dump Scam".  Let's see how many of Forbes 10 tests AURI meets.  Now remember, these are Forbes' tests and since AURI insists on pushing Forbes two year old endorsement, we should certainly consider Forbes one year old advisory.

Be Wary of Reverse Mergers

BINGO!  AURI hits Forbes first test for a pump and dump.  Back when Forbes named AURI  one of 20 most-promising companies (a distinction for which the company nominates itself), AURI was not yet a public company.  One might wonder, why they wouldn't have done an IPO instead of buying a shell and vending the company into it.  The answer is simple: there would have been no takers for the IPO and the insiders wanted to get paid now.  This was clearly evidenced by the fact that the company was only able to raise $395,000 during the first two months of a private placement offering. We're guessing that much if not all of the $395K came from the insiders, as we'll discuss below.

It's worth noting that of the the 20 companies Forbes featured as the most promising, only AURI did a reverse merger with an OTC shell.

Remember Filings Guarantee Nothing

As Forbes themselves tell you, "There are plenty examples of pumps and dumps involving companies that do file reports with the SEC, particularly on the OTC Bulletin Board...".  This is something we've been trying to tell our readers since we launched this website.

Spurn Spam

According to Forbes, 'Accompanying many pump and dumps is the sending of massive e-mail spam and/or the creation of stock-touting Web sites, breathlessly making future predictions of greatness along with meaningless ratings like "strong buy."'  I'll repeat.  At least 16 emails from at least four touts in two weeks.

Don't Ride A Wave

As the Forbes article implies, when volume suddenly rises from nothing, it's a sign that things are amiss.  Now granted, the trading volume on AURI isn't Earth shattering, but it is still significantly more than the few paltry trades than were more commonplace two weeks ago.

Well, according to Forbes, AURI sure meets the tests of a Pump and Dump.

The touts also like to boast that AURI revenues were up last year.  True, but so were their losses.  And the company's cash reserves were cut in half last quarter.

Something else we don't understand are the anemic sales numbers considering AURI claims to have its product in 100s of stores, amongst them, Nordstroms.  We tested that claim by surveying 11 Nordstroms stores across the country.  Now we recognize that each of the 100s of Nordstroms has its own buyer and not all stores sell the same merchandise, but of the 11 Nordstoms we surveyed, not one carried AURI shoes.  In fact, we talked with one women's shoe buyer and she said that she had never even heard of AURI.  So then we went to the Nordstrom website where one can browse by brand name, and sure enough, no AURI.   Similarly, we found no AURI offerings on The Walking Company website, purportedly also selling AURI shoes.  Just sayin'...

Also, much is being made about celebrities wearing AURI shoes.  But in the same breath, we're told that AURI shoes have been included in celebrity gift bags at award shows.  Well sure the celebrities are wearing them.  They got them for free!
We may be willing to accept that insiders will be using some of their ill-gotten booty to repurchase their stock by taking down some of their own private placement, in a scheme known as a gypsy swap.  If this is indeed the case, we would feel somewhat better about the pump and dump's purpose, but nonetheless, it is still a pump and dump and that never bodes well for the share price.  And besides any good will is immediately erased by the preposterous prognostications of the touts.

All in all it's tough to see how AURI can justify even the current $50 million+ market cap, never mind the touts' projected sky high expectations, when it will not even accomplish anything close to $2 million in sales this year.  The indifference amongst street investors and private financiers is rightfully deafening

Back to main page