In February we took a look at internet startup LiveDeal (LIVE) which at the time was the hottest tech microcap on the market. The company’s fast rise though seemed suspicious, and with the recent negative price action LiveDeal is looking like a pretty dead deal going forward.
Most of LiveDeal’s meteoric rise that took place from Dec. 2013 to February seemed built on reports from a paid advertising shill, Stock Media Group. Further, the purportedly impressive traffic for the site seemed to be coming from overseas, and definitely not in California where the startup was said to be doing a soft launch.
Since February, when the daily deals site briefly touched $12 a share, the stock has plummeted, settling in at $6.88 over the April 5-6 weekend. While that might not have been welcome news for the company or its investors, it was welcome news for the short sellers who bet on the company’s bubble pop – LiveDeal currently carries a short float of 17.75 percent, which constitutes an unusual amount of pessimistic investors.
Concerning LiveDeal going forward, it would appear their prospects are dim indeed. But you wouldn’t know that thanks to their aggressive shilling. Just on April 3rd the company put out another PR blast entitled ”LiveDeal, Inc. Addition of Android App Should Greatly Enhance Already Impressive Numbers.” The article was courtesy, once again, of Stock Media Group, the same paid consultants that have pumped the stock since it first took off a scant three months prior.
But regardless of Stock Media Group’s cheerleading, the analysts aren’t convinced. LiveDeal currently has a consensus rating of “sell,” which is highly unusual for any company, to the point where less than a percent of non-OTC, major stocks are rated so badly.
It’s going to take some really good news to stop LiveDeal’s plunge – news that hasn’t been paid for.
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