The pump for Definitive Mattress Company f/k/a Crescent Hill Capital Corp (OTCMKTS:DRMC) started more than three weeks ago and it still seems to be going strong. So far, we have received around seventy alerts over the email and more and more outfits are jumping in on the bandwagon.
According to our database, the budget stands at around $540 thousand and the latest batch of emails is coming from well-known players in the promotional world like The Stock Psycho and Investor Soup.
The performance has been relatively steady. The ticker was quietly simmering around the $0.20 per share mark when the campaign started, but the hype coming from the emails managed to push it as high as $0.50 on Thursday. Now though, the whole thing might be under serious threat.
A Seeking Alpha article appeared around 12PM yesterday in which a contributor who calls himself Penny Stock Realist expresses his opinions about DRMC. Apparently, he isn’t a huge fan.
The promotional effort is listed as a rather big red flag and, in addition to this, the author reckons that the company doesn’t deserve its market cap (which, at yesterday’s close, stands at around $100 million). It should be noted that the contributor disclosed a short position in the stock and many people are wondering about the motives behind his article. Some reckon that he simply wants to push the price down so that he can carry out his short-selling plans while others believe that he truly wants to help investors avoid a few sleepless nights.
Whatever his intentions are, his opinions are influencing the stock. Yesterday, DRMC lost 4% of its value while racking up a dollar volume of nearly $1.3 million and today, about an hour after the opening bell, it’s another 6% down.
Apparently, investors are ready to trust Penny Stock Realist, but we should point out that doing your own due diligence instead of basing your decision on articles that appear on the internet every now and then is definitely a good call. At one point, for example, Penny Stock Realist implies that DRMC have “no business” whereas the annual report and the $896 thousand in revenues registered during 2013 suggest otherwise.
The fact that DRMC is a revenue-generating company, however, isn’t necessarily going to stop the ticker from suffering the effects of the paid pump. The charts on the right, for example, belong to Fresh Healthy Vending International Inc (OTCBB:VEND) and Konared Corp (OTCBB:KRED) – two relatively solid enterprises that commercialized their products some time ago. Unfortunately, the two tickers fell victim to some large-scale promotions which brought them to their knees.
Will the same thing happen to DRMC? We’re about to find out, but the 21.5 million discounted shares that we mentioned last week certainly add another layer of risk. Treading carefully and doing a lot of due diligence is absolutely essential.