Update: HLV Trading, Inc. - Play It Again, Spam
Investigative Reports
August 23 2006
stockpatrol.com
The touts are back at it. Last month we published a report on HLV Trading, Inc. (Pink Sheets: HLVC) a rather non-descript over-the-counter company that had recently announced plans to jettison its stock trading business and focus instead on "responsible development of oil and gas resources in North America." See, HLV Trading, Inc. - Just the Spam Ma'am.
HLV did not offer any rationale for the shift and provided few details of its contemplated operations. On July 13th the Company announced that it had acquired a "60% working interest in a 5 year crown lease of Petroleum and Natural Gas rights in a (sic) 640 acres of land located in Alberta, Canada." HLV did not reveal any meaningful terms of the transaction. The Company, which does not file public financial reports through the SEC's Edgar system or Pink Sheets, did not disclose its financial condition, provide results of its existing stock trading operation, or indicate how it would fund potential acquisitions of oil and gas properties.
Despite the lack of meaningful information, email promoters and Internet touts urged investors to buy HLV shares, citing the Company's "top notch management" and plentiful cash. But while the modest public information available suggested that HLV's management team might have sufficient expertise to run a stock trading business, there was nothing to support the notion that the folks running HLV had a smidge of experience in the energy game.
Not surprisingly, this information gap did not deter the promoters, some of whom who did not even appear to know what business HLV planned to pursue. Days after the Company announced its intention to enter the oil and gas arena, at least one promoter still was extolling the prospects of the Company's stock trading business.
A month later, information remains sparse – but spam emails touting HLV have surfaced once again. This time, the promoters are talking about the Company's latest "acquisition," a 33.3% interest in petroleum and natural gas interests to "another 640 acres of land in the "Foremost" Region bordered between Alberta and Montana." The Company apparently was so excited about its latest venture that it issued the announcement twice – on July 22nd and July 24th – although, once again, neither press release provided material details of the deal. HLV did not say who owned and controlled the remaining 66 2/3% of the venture, who would manage exploration or, most importantly, how much it had paid (or planned to pay) for the interest and how the project would be funded.
In short, absent a pair of vague press releases, there is no material public information about the Company. That has been enough to fuel the spam email promotions. An August 8, 2006 email described the Company as a "brand new entry into the Red Hot energy sector" – something of a stretch by any reasonable standards. The promoter predicted that news of the Company's latest "acquisition" would "send HLVC off the charts," and predicted a series of price projections: a "worst case" target price of 43 cents for HLV shares, a "most probable case" target price of 74 cents, and a "best case" target price of 96 cents.
A week later the price projections had become a bit more aggressive. An August 16th email called on investors to "pick up HLVC as early as possible" on August 17th, again predicting that the "news" would "send HLCV off the charts." This time the spammer, projected a "worst case" price target of 45 cents a share, a "most probable" target price of 75 cents a share, and a "best case" stock price of 99 cents a share.
A number of Internet promoters have joined the chorus for HLV. On July 24th, OTCStockExchange.com, which describes itself as "a leading investor relations firm," issued a "Stock Watch Alert," citing the Company's latest acquisition. The same day, OTCPicks.com, which calls itself "an Internet destination for investors seeking information on smallcap and microcap companies," issued a "stock alert" for HLV. Both promoters have reiterated their enthusiasm in recent weeks, joined by other Internet "investor information" services.
Not surprisingly, the spam emails, Internet promotions and press releases apparently have spurred interest in HLV shares. Volume has been brisk. On August 11th, for example, 86 million shares of HLV were traded, as prices fluctuated between 7/10th of a cent and two cents. On August 17th, another 63 million shares were traded. Both of those trading spikes coincided with promotional campaigns on behalf of HLV, by spam emails and Internet "information services." Not surprisingly, HLV's stock price has yet to approach any of the ambitious targets preditcted by the spammers.
Unfortunately, none of these purveyors of information saw fit to mention that there is no meaningful information available about the Company. They simply informed investors that the time was right to jump aboard HLV – and at the same time created a receptive audience for unknown and unnamed individuals who were poised to sell millions of shares.
Pink Sheets, on the other hand, recognizes that hype, coupled with meager disclosure, poses a problem for investors. As of August 23, 2006, Pink Sheets was declining to publish quotes for HLV shares, explaining that:
Pink Sheets believes adequate current information must be publicly available during any period that the issuer or affiliates of the issuer are directly or indirectly engaged in promotional activities having the effect of encouraging trading of the issuer's securities in the OTC market. Pink Sheets has observed that such promotional activities are occurring for this security, but that adequate current information may not be available. Consequently, Pink Sheets has removed the quotes from this website until such information is made available by the issuer to the investing community. Investors are encouraged to use care and due diligence in their investment decisions
That about says it all, doesn't it?
IF YOU HAVE QUESTIONS OR COMMENTS FOR STOCKPATROL.COM, CONTACT US AT editor@stockpatrol.com |
