What is an even better sign of an impending collapse in stock price than a pump and dump? A fake pump and dump! There are enough traders that buy pump and dumps that a large shareholder in a company, rather than paying big money for a large hard mailer campaign or paying a bunch of email promoters to promote their stock, can simply pretend to have spent big money on a stock promotion and then leak news of the stock promotion to traders on message boards, on Twitter, and in chatrooms. This is what appears to have happened with Be Active Holdings (JALA) back in March. See my blog post on that promotion, which purportedly had a $2.5 million budget but was almost certainly overstated; I was dubious at the time and recommended against buying the stock. While JALA had two nice up days it soon dumped hard and left many with huge losses. I never saw evidence of any hard mailers sent out promoting the stock.
Yappn Corp (OTCBB: YPPN) appears to be much the same but it looks like whomever put it together has put even less effort into it. The pump page is not very long at all and it appears that little work was put into it. The disclaimer is similar:
CAC plans on spending a production budget of up to $2, 150, 000 on postage, printing, publishing, and marketing for the benefit of advertising Yappn Corp. through direct mail and on the internet. The officers and directors of CAC are currently holding six million three hundred thirty five thouand shares of YPPN common stock and reserve the right to buy more or sell these shares without prior notice.
Note that it doesn’t state that they have spent $2.15 million, only that they ‘plan’ to spend that much. I would be surprised if they spent more than $10,000 or so total, with all of that paying for the pump website. The market cap of Yappn is already insane so I believe this stock will go almost straight down. I would call this perhaps the best short opportunity of the year. Unfortunately I have not yet found shares to short.
Promoter: Catalina Advertising Corporation
Paying party: ??
Shares outstanding: 142,500,000
Previous closing price: $0.75
Market capitalization: $106 million
Important Disclaimer and Disclosure: YPPNReport.com is a newsletter service of Catalina Advertising Corporation (CAC). (CAC) is not a registered financial advisory. The information presented here is not an offer to buy or sell securities, it is solely meant to be an advertisement for Yappn Corp. CAC does not guarantee as to the accuracy of the information in this newsletter, it was taking entirely from public sources. Penny Stocks are considered to be highly speculative and may be unsuitable for all but very aggressive investors. CAC plans on spending a production budget of up to $2, 150, 000 on postage, printing, publishing, and marketing for the benefit of advertising Yappn Corp. through direct mail and on the internet. The officers and directors of CAC are currently holding six million three hundred thirty five thouand shares of YPPN common stock and reserve the right to buy more or sell these shares without prior notice. Investors should also be aware that this will affect the stock price. This report does not provide any analysis of the company’s financial position. The featured company’s financial position and all other information regarding the featured company should be verified directly with the company. The target price was based on an assumption of one percent of facebook’s market cap success, please always consult a registered financial advisor before making any stock purchase decisions.
PDF copy of pump page.
[Edit 2013-6-3]: I saw a search ad linking to YPPNReport.com on Yahoo: