FAVORED INC (OTCMKTS:FVRD), which seemed to excite the market in November 2017, has finally seen on November 28, 2017 the OTC Markets Group designate the stock as Caveat Emptor. The company seems to have conducted promotional activities that the exchange disliked.
The market rapidly reacted to the news. The amount of shares that changed hands after the announcement was very large; more than 40 million shares. The share price declined from $0.02 to hit share price level below $0.01 .
It is a pity, because the company was releasing good announcements like new debt agreements, and float reductions that the market had appreciated. From trading close to $0.0018 in October 2017, the stock price had been pushed hitting $0.026, six-month highs.
Have a look at it before we provide some some more details:
For those readers who don’t know FVRD, it is a holding seeking to acquire and grow businesses by “generating long-term sustainable free cash flow and attractive returns in order to maximize value for all stakeholders.” Two companies are part of the portfolio:
- Kryptos Communications, Inc.: it develops a mobile application using 256 bit AES military grade encryption intended to provide personal privacy and security.
- Empire Mobile Studios, Inc.: seeks to publish, acquire, and develop digital web and mobile assets in different sectors including eCommerce, games, and Blockchain technologies.
On October 27, 2017, the market received good news. FVRD noted the beta launch and testing of BitTraderPro.com, a crypto currency exchange and trading platform.
Craig Coaches, President of Favored Inc., explained that trading “crypto currencies has barely gotten outside the realm of the tech savvy.” So, in the long run, this activity is expected to grow at a large pace. Additionally, it was noted that the traders interested in testing the platform could do so by sending a mail to firstname.lastname@example.org.
Finally, the company also noted that it had recently reduced the number of shares authorized from 3 Billion shares to 975 Million shares common stock authorized. It was also remarked that reverse stock split actions are not expected, which is a good news.
On November 2, 2017, the company announced that it was working on the integration of Ethereum R&D onto BitTraderPro.com. We believe that it was a good business decision. Ethereum is gaining traction. In year to date basis, Ethereum’s growth is greater than 2,600%. We believe that the company could benefit from it if the trading platform is innovative.
In the same press release, the company also noted that it was “working to reduce the number of outstanding shares of the company’s common stock,” which was also good news.
On November 21, 2017, a new agreement with a new partner was signed to mine Ethereum and Zcash. The following were the words of Craig Coaches, President of FVRD:
“We believe that the crypto mining contracts provide some exciting opportunities for the company. We look forward to providing additional updates in the near term” Source
Additionally, the company noted that it had released 46 million shares of free trading common stock out of the float decreasing the number of shares of common stock outstanding.
Then, the bad news arrived to the market.
On November 27, 2017, the OTC markets noted that it had been aware of certain “promotional activities concerning FVRD and its common stock encouraging investors to purchase shares via an unsolicited email campaign by a source unknown to the company.”
Please read the response given by the company:
“The Company would like to emphatically state to its shareholders and the general investing public that neither Favored, Inc., nor any member of its management team has ever initiated or participated in any promotion or awareness program for its common stock. Furthermore, neither the company nor any member of its management team authorized any 3rd party to engage in any promotion or awareness program on the company’s behalf. Favored, Inc. will fully comply with OTC Markets’ policies regarding fraudulent promotional activity and will correct and dispel any misleading information that the company becomes aware of. We look forward to curing this issue in the most expeditious manner possible.” Source
What will happen now and what’s our take?
In the press release, it was noted that the exchange had designated FVRD as Caveat Emptor for a minimum of 30 days. After this time period, the company will have to contact the exchange and explain the situation. Most of the times, this bad note is removed without any problem.
Currently trading with a market cap of $7.8 million, FVRD is an exciting story among small caps. We believe that the company was doing good work until the promotion activities commenced. It does not matter whether the company was involved or not. When the market authorities identify any kind of market manipulation, they need to hold conversations with the firm until the situation is solved. We look forward to the removal of the symbol and will be monitoring the situation closely.
We will be updating our subscribers as soon as we know more. For the latest updates on FVRD, sign up below!
Image courtesy of Michael Dales via Flickr
Disclosure: We have no position in FVRD and have not been compensated for this article.