It is amazing what a paid pump and three letters can dot to a penny stock. Here, the three letters under discussion are F, D and A in succession that forms FDA. On Monday, Axxess Pharma Inc (OTCMKTS:AXXE) reported that it received an approval from the FDA for the sale of its nutritional supplements products and additional protein powders.
The third parties decided to benefit from the news. More than $55,000 was spend to start incredibly long line of promotions for the company. The results were impressive for two trading sessions.
In just two consecutive sessions, Axxess Pharma stock price managed to post gains of more than 160. It closed the Tuesday’s trading session at over $0.16 per share. However, it crashed terribly in Wednesday’s trading session. The volume was massive as 11.8 million shares were traded in just six and a half hours.
Axxess Pharma Inc (OTCMKTS:AXXE) stock declined 30% of its value and closed the day at just over $0.11. Some investors might argue the decline as a consolidation, but considering the massive volume and the fact that nearly a third of the market capitalization was eroded in a single session, it appears more like wishful thinking.
There weren’t any new filings or bad news to support the massive fall. So, it can be assumed that the decline was caused by one of the most formidable enemies which is known as excessive hype. The announcement related to the FDA approval is in no ways bad.
Moreover, the protein powders and the nutritional supplements will be offered under the TapouT name which again is an internationally reputed brand. The revenue from products is expected to be solid; still, the people who were jumping overlooked some important red flags connected with the company. One of the prime concerns is the historical performance affected by paid pumps.