Earlier in March a paid pump was circulated for the stock of Axiom Corp (OTCMKTS:AXMM) which highlighted the design details of a landing page. There was also another email circulated by Investor Edge. The share price moved from level of $1 per share to close to $1.84 by end of March month, largely due to the artificial hype formed out of the promotion.
The pumped OTC stocks disclose almost same story. The pumps are circulated to attract attention of shareholders to a particular company’s stock. The pumps results in a momentary surge in prices. Here, it is important to lay emphasis on the word momentary as the positive impact does not stays for a longer time. It was a similar story with Axiom pumper. The promotion email projected some aggressive positive statements. Don’t forget that the work of promotional outfit firms is to create the hype for the targeted stocks. In Axiom case, Investor Edge predicted to get funds between $170,000 and $200,000 in exchange of their public awareness services for four months.
The second problem with Axiom Corp is the concerns of shareholders related with millions of discounted shares. These shares can be set free in the market. In fact, a few years ago, Axiom Corp diluted more than 26 million shares at a rate of $0.0015. There were many shareholders who benefitted from the move. Whenever the large quantities of shares enter into the market at discounted prices, the share price gets adversely affected. The sharp decline in AXMM share price can be largely attributed to the common stock dilution.
Last week AXMM recorded the massive volume of 7.4 million shares in a single trading session, however it came with a decline of over 45%. The decline further intensified in the week and the stock posted drop of another 38% and in last trading session AXMM plunged almost 3% to close at $0.270. It could even plunge lower as even after the sharp plunge and erosion of value, the company has a market capitalization of over $20 million.