the OTC .today

Wednesday, October 5, 2011
Today's PUMPs & dumpS

Can An Investment In Medical Billing Assistance Make You Sick?

At first glance, the new promotion on Medical Billing Assistance (MDBL) seems harmless enough, as this does appear to be a legitimate company with actual customers and revenues and we see no reason to doubt that.  While we add all promoted stocks to our watch list, we were inclined to call the program a promotion rather than a Pump & Dump.  Then one of our readers pointed out aspects of this deal that made us take a closer look.

Recently, MDBL took out a $7.55 million loan at an astounding 6.1% interest rate, approximately 60 basis points more than the interest rate they were paying on the mortgage on their over-financed office building. While that mortgage was paid off with proceeds from this loan, the company banked $1.755 million at that expensive money, which we're sure will be used to pay operating costs including the probably generous salaries of certain insiders.  We see difficulty with current net revenues enabling the maintenance of this loan, even if it called for an interest only payment.

However our main concern with MDBL, and what we feel is the drive behind the new PnD scheme, is the recent maturation of 40 million shares issued to FDIC Medical, Inc and FDIC Holdings, Inc in the transaction in which MDBL acquired the FDIC assets.  The transaction, which according to the company increased their tangible assets by $4.8 million, translates into value received of 12 cents per share for the 40,000,000 shares issued.  Shares of MDBL opened today at 79 cents, representing a 650% paper increase in the value of FDIC's shares.  We feel that the new PnD campaign provides a conduit for the shareholders of FDIC, whomever they are, to cash out some stock for a significant cash bonanza.  Making us even more uncomfortable is that we cannot find an entity named "FDIC Medical, Inc." or "FDIC Holdings, Inc." registered anywhere and we fear that this transaction may be a ruse designed to enable the insiders of MDBL to sell stock under the radar.

Aer Energy Resources (AERN) is desperately trying to keep their share price above water in a Pump & Dump that offers one of the more ridiculous stories we've seen for a while.  Several additional touts have been brought on board to pimp the stock but the insiders are all competing with each other to blow out their holdings.  This is evident by the fact that the stock, which up until last week hadn't traded, suddenly has 100 million shares sold and for sale.  When the insiders are competing for buyers, the share price is sure to go down, as is currently the case.

It didn't take us long to be wrong about Macrosolve (MCVE).  Last week, in response to reader inquiries, we stated that we saw no evidence of promotions which could indicate a prelude to a Pump & Dump campaign.  Well at least two touts started sending emails on MCVE today, so we'll eat the appropriate helping of crow.

Since Tuesday's close: 

EmailStockPicks.com and at least 1 other paid tout have been promoting IFCR in conjunction with a new promotion. 

ElitePennyStock.com and at least 1 other paid tout have been promoting MCVE in conjunction with a new Pump & Dump campaign. 

EliteOtc.com and at least 3 other paid touts have been promoting TRTH in conjunction with a new Pump & Dump campaign. 

TooNiceStocks.com and at least 2 other paid touts have been promoting MDBL in conjunction with a new Pump & Dump campaign. 

Xtremepicks.com and at least 1 other tout have been promoting IFHR in conjunction with an ongoing, promotion.

KillerPennyStocks.com and at least 7 other paid touts have been promoting AERN in conjunction with an ongoing Pump & Dump campaign. 

WhisperFromWallStreet.com has been promoting FXPT in conjunction with an ongoing Pump & Dump campaign. 

JuicyStockPicks.com has been promoting ITNS in conjunction with an ongoing Pump & Dump campaign. 

ClubPennyStocks.com has been promoting FGLD in conjunction with an ongoing Pump & Dump campaign. 

PennyStockNewsletter.info has been promoting BHRT in conjunction with an ongoing Pump & Dump campaign. 

PennyStockExpert.com and at least 1 other paid tout have been promoting POTG in conjunction with an ongoing Pump & Dump campaign.

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