Adamis Pharmaceuticals (ADMP): Compounding Risk
by Sonya Colberg, Senior Editor, 5/4/2016 9:56:30 AM
A private company that is a walking liability has been acquired by Adamis Pharmaceuticals (Nasdaq: ADMP), posing an incredible danger to the public.
Yet when Adamis announced it was paying ~$9.7 million in stock for the little Arkansas drug store dogged by a big product recall, the uninformed market cheered.
Incredibly, fevered buying continued, sending Adamis shares this morning to a multi-year high of over $9 per share.
TheStreetSweeper presents six key risks poised to hammer this stock back down to sanity.
*1. Terrible Acquisition
Shares blew up on news that Adamis would be acquiring US Compounding in a stock deal worth nearly $10 million.
What investors didn't understand was what Adamis got for its investment.
Adamis has acquired a company that recently recalled ALL of its sterile products nationwide, at the request of the Food and Drug Administration. In fact, the recall is ongoing (here) for more than 70 veterinary products.
Click here to see the recall list affecting patients, clinics, providers and hospitals nationwide.
All US Compounding sterile products were recalled because the FDA is concerned about sterility.
The recalled human and veterinary products were distributed from March 14, 2015 to September 9, 2015. Before the recall, customers had filed 108 formal complaints with the FDA about US Compounding products.
When the FDA walked in one day last August to inspect the little drug store, agents uncovered their own long list of issues. The problems they discovered spanned 11 pages, here.
Nevertheless, under the acquisition agreement, Adamis will pay the US Compounding CEO more than 866,000 shares plus a $300,000 yearly job with Adamis.
And what will Adamis receive for its investment?
In return, Adamis has gotten $5.7 million worth of debt, the challenge of trying to squeeze some revenue from a troubled drug store, plus a huge dose of liability exposure ... as evidenced by that company's recall "due to deficient practices."
If Adamis had been serious about building a compounding business, it would not have bought a company with deficient practices, sterility concerns and a massive recall under its belt.
*2. Why US Compounding Put Itself Up For Sale
US Compounding found itself in a pickle. Its name had been indelibly tainted by last winter's recall.
Every recalled item from injectable aspirin to injectable testosterone had begun piling up in the little drug store at 1270 Jims Lane, in Conway, Arkansas.
Great Panther Silver (GPL): Perfectly Priced To Cave In?
by Sonya Colberg, Senior Editor, 5/2/2016 11:03:54 AM
Great Panther Silver (NYSE: GPL) stands at the brink of a teeth-chattering stock decline.
Over the course of the past year and a half, stock in the Canadian silver mining company settled in below $1 per share, sometimes falling to 30 cents.
Then shares suddenly blew up. Did this happen because the company hit a rich vein of silver?
Not at all. Rather than Panther suddenly hitting on fortune and reversing shareholders' negative return on equity, the stock has been shored up by ambitious stock promoters. Now Great Panther appears perfectly priced to drop.
Here are the top six reasons TheStreetSweeper is shouting, "Look out below!"
*1. Why Great Panther's Stock Is Up: Jonathan Lebed Special
After seven months of trading between ~40 cents and ~$1 per share, Panther stock suddenly blew up in late April:
What happened? Well, Panther can primarily thank a well-known stock promoter.
Indeed, last Thursday, on April 28, 2016, National Inflation Association sent out a stock promotion to thousands of email recipients. The hype began like this:
(Source: National Inflation Association)
Despite the name of the sender, this email and others like it have nothing to do with the organization's purported mission of fighting inflation. NIA is not some quasi-governmental agency sworn to help people but instead is all about enriching the NIA.
Jonathan Lebed is the main man standing behind the NIA's flimsy curtain of respectability. Mr. Lebed attracted national attention in 2001 when the Securities and Exchange Commission accused the then-teenager of manipulating stock in a pump-and-dump scheme. Without admitting any wrongdoing, he settled for $285,000.
Mr. Lebed commented:
(Source: New York Times )
Mr. Lebed has been a key figure in stories by TheStreetSweeper and publications such as The New York Times, which wrote of Mr. Lebed's stock trading activities:
"This type of stock fraud is hardly victimless. When a stock price rose from $1.38 to $4.69 on the strength of his false recommendations, then fell to $1.88 after his manipulation stopped, there were winners and losers."
The recent NIA/Johnathan Lebed promotion on Panther is merely the latest in a long string of hype that has inflated the stock.
Mr. Lebed has been cheerleading Panther periodically since 2014. Back in August 2014, Lebed.biz emailed a promotion to thousands mentioning Panther under its Toronto Stock Exchange trading symbol of GPR. The hype said in part:
There's a huge fundamental problem with promoted stocks, arguably most especially those promoted by Mr. Lebed.
Such stock promotions themselves push up the share price. So the stock price increase typically is not a reflection of any good business practices or even good luck experienced by the company.
That means the share price will virtually always drop. Because there's nothing but fluff supporting the price.
*2. Kiss Of Death: Rodman & Renshaw
Panther investors need to understand two unfortunate, crucial actions by investor Rodman & Renshaw.
First, Rodman & Renshaw - which was a key institution investigated during the Chinese stock fraud issues of 2010 to 2013 - raised its target price for Panther from $1.10 per share to $1.50 on April 14.
Panther stock rose.
Next, on April 20 - six days later - the firm inked a deal with Panther for a $10 million at-the-market (ATM) facility.
By that time, the stock had jumped 33 percent from the day of the price target upgrade to $1.48 on the day Panther and Rodman & Renshaw signed the deal.
JAMN Finally Spills the Beans -- And It's an Ugly Mess
by Janice Shell, 6/2/2011 10:32:51 AM
To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.
Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.
JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.
Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?
by Janice Shell, 6/2/2011 10:30:25 AM
It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.
Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.)
CCME: Few Signs of Life at 'Healthy' Chinese Firm
by Roddy Boyd, 3/23/2011 9:30:34 AM
Also, and this cannot be understated, hanging out on a sidewalk in Fujian–the sidewalks double as parking spots when the streets, which appeared to have been designed in the Han Dynasty, fill up–was not a viable option. There was also the matter of the world-class headache the Financial Investigator was developing from Fuzhou’s diabolical smell, an epic conflation of poor sewage treatment, air pollution and the smell of cabbage that made getting the hell off Dongjie street a matter of vital importance.
The Financial Investigator and his traveling companion for the trip, an American investor with extensive experience in China, decided to head upstairs despite our interview with the CFO having been cancelled at the last minute (with no explanation given.) We thought a quick tour of the offices and meeting a few other executives might open our eyes to a few things.
Though the language barrier was a little steep with the young receptionist–when we asked for writing paper, she provided Kleenex–we were in short order shown to their conference room and told to wait. It did not escape notice that pride of place in the conference room belonged to a framed certificate of participation from the Fall 2010 Rodman & Renshaw conference, the World Cup for reverse merger companies and the pumpers and touts who peddle them.
Eventually chief operating officer James Yu came down and after spending 30 minutes trying to understand who we were, concluded that giving us a tour wouldn’t hurt. Soon enough, his colleague, Vinne Ye–the chairman’s assistant–came out and took us around.
It was most eye-opening.more...
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