So a thread started the other day by SLOOF here:
https://forum.mrmoneymustache.com/investor-alley/i-know-they%27re-often-risky-garbage-but-does-anyone-dabble-in-penny-stocks/msg246360/#msg246360 got me to check in on a penny stock I bought a couple of years ago, lo and behold it has just recently tripled in value.
Quick background, I used to work for the local health department. Not long after I opened a brokerage account, my office was visited by a salesman for a company called Bioject (BJCT) that sold 'needle-less injection technology.' They were marketing their product across the country as a way to reduce risk of infectious disease from needlesticks. They had also just recently gotten contracts with a couple of regional pharmacies who were going to begin offering the flu vaccine through Bioject injectors. I noticed when I researched the company that they were publicly traded and I envisaged there was a market for their products and it seemed to be a company that had some potential. They were on the pink sheet trading at around 25 cents a share (after having been $40/share in the early 90s, I believe they filed for bankruptcy around 2001). I decided it was a worthwhile speculative investment, I had actually met someone at the company, seen their product, and saw a market for it (as someone who dealt with vaccinations regularly).
About a month after I invested $250 to get 1100+ shares at 22 cents a piece, the FDA denied approval for their injector for use with the flu vaccine which decimated the stock price---at which point I figured my money was gone and wrote it off as a useful experiment in penny stocks.
I would check on the price from time to time over the past couple of years and it hovered pretty consistently between 8 and 10 cents a share. In January, there was news that they had received approval in Australia for their products which saw a bump to about 14 cents a share. Then, just this week, seemingly out of the blue the price has gone up steadily, closing at 38 cents a share today. I found their most recent news release from Monday 3/13 which included their year end financials, which were not good. $1.5 million in revenue, $2.5 million in operating cost, loss of $1 million for the second (probably 3rd) year in a row.
In sum, what's the deal here? Poor financials for yet another year but the stock nearly quadruples from 10 cents a share in January to 38 cents a share today. If I sold first thing tomorrow morning (at 38 cents) I would be up $186 bucks (less transaction costs and taxes). However, every cent this thing climbs is another $10 dollar return for me. If there is something legitimately driving the value of the company up---maybe it actually is making some rebound---I could stand to make a nice little chunk of money. If it's just market quirks or if their lucky number has been pulled by some pump and dump scheme and collapse is inevitable, I'd like to get out while there's at least a few dollars in it for me.
Is this suspicious of a pump and dump or am I just thinking along those lines after having read the article someone posted in the penny stocks thread from the other day about Jordan Belfort?