Saturday, February 13, 2021

Humbled Trader: Beware of Penny Stock Offerings when Day Trading- $AVEO $OPTT SEC Filings for Beginners

Feb. 13, 2021

Here is the link. 

I like to choose a few youtubers to follow, so that I can build some knowledge about business, improve my English, and make my investment more fun and rewarding. I like to slow down and keep learning. 


We've seen some hot penny stock runners such as AVEO, BPTH and OPTT recently. Today we'll be digging deeper into OPTT and AVEO SEC filings and find out some dirt on these sketchy stocks. Time stamps: 0:42 - $OPTT Stock. Former runner 1:47 - Reading beyond $OPTT news release headline 2:43 - $OPTT SEC Form 8-K 3:24 - Three MAIN reasons a penny stock company will do a reverse split 4:29 - $OPTT SEC 10-K financial statement shows the company needs to raise more money 5:05 - $OPTT filed a S-1 to register shares for a $15 Million offering 6:00 - $AVEO. Penny stock ran from $0.60 to almost $2 per share 6:52 - $AVEO also has a SEC Form 8K. Also a delisting notice from Nasdaq compliance. 7:55 - Conclusion $OPTT Stock. A former runner penny stock that is known for gaining hundreds of percent within one day. On April 3, 2019, the company released a news release premarket titled “Ocean Power Technologies Wins Contract with Leading Oil & Gas Operator”. That seems to be the headline with a lot of key words many day trading chat rooms use to alert their members to buy. But buying with alerts and keywords isn't enough to find out the truth. It's by going to their NASDAQ filings that you can see OPTT filed a Form 8-K on March 20, 2019. It was their compliance notice from the stock exchange to keep their share prices up. If their stock shares kept on diluting they will be delisted and go to OTC (pink sheets like in Wolf of Wall Street). OPTT then did a1 to 20 reverse split on their stock shares to get their share price above $1. Before they were trading around $0.50 to $0.60. After the reverse stock split their price was finally at $6. How to Buy Penny Stocks Overnight ▶︎ https://youtu.be/7e0AgpjYwjg How to Trade Premarket Gap Ups ▶︎ https://youtu.be/d55SAYjBHd0 There are three major reasons a penny stock company would want to reverse split their stock shares: 1. To maintain $1 minimum bid price by the NASADQ exchange compliance. 2. To stay attractive to potential investors if they want to raise more funding 3. To tighten their own penny stock float. The amount of shares outstanding available for trading. Furthermore, after digging into their SEC Form 10-K, their financial statement, we can see that the stock is burning cash like crazy and they desperately need money to stay operating. So now we know OPTT is in need for more cash funding, they did a reverse stock split to lower their share float, and they released a fluffy press release Wednesday morning to pump their penny stock share prices up... all for what? An ATM Offering incoming. The company already filed a Form S-1 to the NASDAQ, to register new shares to do an offering to raise $15 Million dollars. So this is the real reason OPTT was trying pump their share prices up and lure in traders' and investors' money. Next we have AVEO stock ( AVEO Oncology Pharmaceuticals ). Stock was trading under $0.60 per share before the recent news release pumping starting on March 27, 2019. The stock ran from sixty cents to almost two dollars. So what's the real reason they are propping the share prices up? Indeed AVEO was also served with a Form 8-K by the NASDAQ. To remain listed on the Nasdaq stock exchange they must have their stock prices remain above $1 for ten consecutive trading days. This penny stock company is in a very similar situation as OPTT. They are cash poor and desperately need more money to stay operating and do their pharmaceutical drug research. Unfortunately most people and penny stock trading chat rooms buy into the keywords in the headlines. But it’s by going beyond just the headlines you will find out the real reason these penny stocks are being pumped up. These penny stock pump and dump happens all the time every week. Most people don’t spend the extra time to read over the filings but it’s by doing a little bit more work that will give you the edge in making theses trading decisions.

No comments:

Post a Comment