Yesterday, the realm of high volume penny stocks was shaken by a huge stock price crash. In other words, the shares of Healthmed Services Ltd. (PINK:HEME) depreciated by more that 46% and reached a price $0.042. Trading volume was higher than usual but it was the day before that the number of traded shares reached its highest ever value at 74 million. Since the start of the week, shorted volume has been varying between 22% and 29%.
On Nov. 19 a stock promoter started a massive advertising campaign of HEME. The stock alert indicated that a third party had promised to pay $100 thousand for a one-week promotion of the company. Apparently, the promotion did a great job as with the start of this week's trading session the price of HEME shares skyrocketed almost 93%.
So, the reason for the current sharp decline in the value of HEME stock seems to be the aftereffect of the promotions, when investors create an avalanche of sale-outs.
On Nov. 22, when the stock made its huge jump, the company came out with two announcements to bolster the desired price surge. The first press release announced the launch of one of the company's software products. The other one said that the company had made an agreement with Veritas Software Systems, which obliged Veritas to create a couple of exclusive software systems for HEME.
Other than that, from a financial point of view it must be mentioned that the company has practically no assets, while its liabilities amount to $306 thousand. There is no trace of revenue since its inception and in addition it seems that the main occupation of HEME is paying stock promoters to manipulate investors.
And according to the last 10-Q report of HEME “ the company's activities to date have been supported by equity financing”. Therefore, investors should be aware that the same promotions which lure them to this company are paid with their own money.