- Proactive Investors LTD is an international stock promoter with clients and region specific websites in the US, the UK, Canada and Australia.
- Several of Proactive Investors’ most heavily promoted biotech/pharma clients, such as CYDY and CODX, have recently enjoyed substantial increases in their share price. These companies raise several red flags.
- Between January 1, 2020 and and May 26, 2020, Proactive Investors has published 410 promotional articles on 31 pharma/biotech US companies for which it has received close to $800,000 in compensation.
In this sixth installment of our Investor Warnings series focused on so-called “dubious” third parties we will be taking a break from funds and creditors and instead turn our attention to a paid promoter. As most smallcap/penny stock traders should be well aware, paid promotion is oftentimes one of the main drivers of demand for this type of equities and thus a crucial factor behind many of the parabolic runs that have become somewhat pervasive in recent months. Consequently, promotion is one of the biggest red flags a publicly listed company can raise as it is more often than not an indication the company in question is struggling and needs to resort to paying for promotional material that paints them in a favourable light in order to stand a chance of attracting any sort of investment. Understanding paid stock promotion is a crucial tool for traders who seek to discern how “genuine” a stock’s price action is, which can prove invaluable when choosing and timing trades. For this reason we turn our attention to Proactive Investors. When it comes to paid promotion few outfits have the level of reach or output that Proactive Investors has had over the last few months, meaning that it provides a few recent examples of how “artificial” media coverage can be strongly “correlated” with the good fortune of a few publicly listed companies.
Proactive Investors LTD is a private UK company incorporated in 2005 by Ian William McLelland. Mr McLelland is a Canadian citizen who to this day had held the posts of director and CEO. The other key figure at Proactive Investors is an Englishman by the name of Craig Stephen Ribton, he has held the post of director at Proactive Investors since 2006 and along with Mr. McLelland, holds a controlling stake in the company. Proactive Investors Limited describes itself as “one of the fastest growing financial media portals in the world, providing breaking news, commentary and analysis on hundreds of listed companies and pre-IPO businesses across the globe, 24/7” whose purpose is to “enable companies and investors to connect intelligently”. The content of Proactive Investors is fairly extensive, covering publicly listed companies in sectors ranging from Basic Materials to Health across the USA, the UK, Canada and Australia, with dedicated websites for each one of these countries. Furthermore, there are other websites that are also run by Proactive Investors and that are exclusively dedicated to specific sectors such as miningcapital.com and oilcapital.com. The truth of the matter is that Proactive Investors is little more than a so-called “pump site”, an “information” outlet that is regularly employed by many so-called “dubious” publicly listed companies in order to put out paid for puff-pieces whose sole purpose is to drum up interest among retail investors for the shares of its clients.
In order to illustrate this point we will be taking a closer look at the content published on Proactive Investors’ USA website, more specifically at the Pharma and Biotech section since the beginning of the year until May 27, 2020. Focusing on Pharma and Biotech was done partly for the sake of conciseness and partly because it is currently relevant given the pandemic. Firstly, we will examine four different US publicly traded Biotechs who have paid for Proactive’s services, highlighting the other red flags they raise as well as how Proactive’s coverage of said tickers correlates with the tickers’ price action. Then we will look at a comprehensive list of all the companies that have been featured on Proactive USA’s Pharma and Biotech section to see how many of them have paid for Proactive’s paid promotional services. We will be excluding Cannabis companies from our analysis for the sake of focus and conciseness.
To view the full contents of this report and/or our other Investor Warnings focusing on so-called "dubious" third parties, please select one of the options below. These reports include:To have an idea of what to expect please have a look at our free Investor Warning on Lincoln Park Capital.
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