Why I Shorted A Stock That Just Raised Money At An 89% Discount To Market Price
Posted by Timothy Sykes on Wed 7th of Oct, 2009 11:15:00 AM
Tags:
TIMalert subscribers know in real-time when there are shares available to short…you guys get the news waaaay later when there’s really nothing you can do except learn and feel guilty about not being a subscriber and getting quality information within seconds of my actual trade:
In the past 2 days, Nutra Pharma Corp. did 2 things: yesterday after the market close they announced they raised $2.8 million (which is a good thing considering they had ZERO cash before) and this morning they introduced yet another cobra-venom-based pain reliever. Next week, they’ll be introducing their other cobra-venom-based pain reliever and I’m sure they’ll hype it up as much as possible.
So in the face of such positivity, why would I short this stock because as you might know I hate shorting stocks under $1…there’s a few reasons, like there aren’t more than 100,000 shares to short available so I had to take my splice of the pie while I could and the fact that after this stock did a perfect typical pump & dump collapse of 50% the other day, its bounced a bit, offering a nicer price to short into and of course the stock is still up 1,400% int he last month on the back of blatant pumping and fluff press releases…oh yeah and this is the company that shares the EXACT same address as an MLM which the CEO of NPHC used to be scientific advisor, which promoted volcanic ash as a cancer cure and whose current CEO has been an executive in companies rebuked by the FTC for false advertising and sued for embezzlement…remember my research blog post from a few days ago
But I shorted mainly they raised $2.8 million by selling 35 million shares at 8 cents/share, an 89% discount to its current price!
Now I’ve ripped on companies like Hemispherx BioPharma, Inc (HEB) and Spongetech Delivery Systems, Inc. (SPNGE) for selling shares at 40-50% discounts to price, but 89% is unheard of!
NPHC seems to expect that as I’ve never seen such scared bullet points in my life under a financing…those disclaimers go faaaar above and beyond normal disclaimers as it looks like they’re protecting themselves in case of loss/lawsuit:
(and longs will say the financing took place when the stock was low, but they don’t understand that these kinds of stock runups aren’t natural…9 times out of 10, it’s the company or the financier who does some stuff/hires some “consultants” (which NPHC did a few months back for stock at 2 and 3 cents/share) to get the stock up in ordr to pull off such a financing…welcome to penny stock land, learn the rules, as I have over a decade in this gutter of the stock market, or be a typical sucker, your choice)
TIMalert subscribers were then emailed/notified of what I expect the stock to do over the next few days and week and my goal on this trade…you’re only reading the free version so you don’t get to my PROVEN analysis:
Nutra Pharma Corp. is referred to herein as “we,” “our,” or “us”.
Section 3 – Securities and Trading Markets
Item 3.02. Unregistered Sales of Equity Securities
On August 20, 2009, our Board of Directors authorized the offer and sale of our common stock at $0.08 per share. From September 1, 2009 through September 22, 2009, we sold 34,948,750 million common shares (the “Shares”) to 65 accredited investors for aggregate proceeds of $2,795,900. The Shares were offered and sold in private transactions in reliance upon exemptions from registration pursuant to Section 4(2) and 4(6) of the Securities Act of 1933, as amended (the “Act”) and Rule 506 of Regulation D promulgated thereto. On September 30, 2009, we accepted all the subscriptions and authorized the issuance of the Shares.
We intend to use the proceeds from the sale of the Shares for working capital purposes, hiring new employees and to scale up manufacturing for our over-the-counter pain reliever product, Cobroxin.
We relied upon Sections 4(2) and 4(6) and Rule 506 of Regulation D of the Act in connection with the issuance of the securities. We believed Sections 4(2) and 4(6) and Rule 506 of Regulation D were available because:
●
We are not and were not a blank check company at the time of the offer or sale;
●
The investors had business experience and were accredited investors as defined by Rule 501 of Regulation D of the Act;
●
All offers and sales of the investment were made privately and no party engaged in any general solicitation or advertising of the proposed investment;
●
Each investor had a preexisting social, personal or business relationship with us and members of our management;
●
The investors were provided with all information sufficient to allow them to make an informed investment decision;
●
The investors had the opportunity to inspect our books and records and to verify statements made to them;
●
The securities representing the investment were issued with a restrictive legend indicating the securities represented by the certificate have not been registered; and
●
No party received any transaction-based compensation such as commissions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: October 6, 2009
Nutra Pharma Corp.
/s/ Rik Deitsch
By: Rik Deitsch, Chief Executive Officer/Chairman of the Board
TIMstore Monthly DVD Specials:
See all TIM DVD specials HERE
Related Reading
-
tradeprofits
-
goergepennystockinvestor
TIM Trades
View All| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Nov 19 | AENY | $2.80 | $3.02 | $1148 |
| Nov 18 | NLST | $4.16 | $4.40 | $947 |
| Nov 18 | IMGG | $1.42 | $1.64 | $2094 |
| Nov 17 | NLST | $5.04 | $5.59 | $2195 |
| Nov 13 | VRMLQ | $21.50 | $22.97 | $2901 |
| Nov 11 | EONC | $2.61 | $2.80 | $687 |
| Nov 10 | EONC | $2.74 | $3.36 | $9784 |
| Nov 6 | QXM | $4.31 | $4.80 | $1936 |
| Nov 4 | COT | $8.66 | $8.88 | $642 |
| Nov 4 | QXM | $4.61 | $4.89 | $822 |
| Oct 30 | DDRX | $25.70 | $26.53 | $812 |
| Oct 29 | CTDC | $4.00 | $4.42 | $781 |
| Oct 26 | AWSL | $3.24 | $4.10 | $2516 |
| Oct 23 | RODM | $5.27 | $5.23 | $301 |
| Oct 22 | AMLM | $2.69 | $2.97 | $820 |
| Oct 22 | USEG | $6.12 | $6.09 | $85 |
| Oct 20 | CBOU | $8.93 | $9.06 | $243 |
| Oct 16 | VRMLQ | $16.79 | $18.65 | $2773 |
| Oct 13 | YONG | $11.05 | $11.66 | $1202 |
| Oct 13 | NPHC | $0.59 | $0.71 | $583 |
| Oct 12 | IMGG | $0.60 | $0.70 | $682 |
| Oct 9 | ZAGG | $5.50 | $6.10 | $2380 |
| Oct 7 | GVBP | $0.03 | $0.27 | $702 |
| Oct 1 | NPHC | $0.70 | $0.85 | $1482 |
Total: $98,094 (681%)
