Writing about ongoing paid promotions will be one of my new focuses with my Substack Newsletter. Paid stock promotions have been an area of interest of mine going back a number of years and I am excited to write about them in near real time.
On September 20, 2021 I received four emails for a paid promotion on Medigus Ltd $MDGS. Broad Street Alerts (Small Cap Specialists LLC) and Traders News Source (TNS LLC) who appear to be the same company, and Blue Horseshoe Stocks and Stock Sumo who appears to be a different company.
Broad Street / Traders News Source
Blue Horseshoe Stocks / Stock Sumo
In the disclosure at the bottom of the promotions, it states the owners of the website promotion were compensated by a bank wire in the amount of $22,500 in cash for the Broad Street/Trader . It does not disclose who the party is who made the payment. Blue Horseshoe Stocks / Stock Sumo disclosed they received $25,000 paid by an undisclosed party for a one month awareness campaign.
This promotion is the second one I have seen ran for $MDGS. The prior one was ran on August 23, 2021 per the above disclosure.
Obviously the promotion worked as the volume has jumped considerably versus before the promotion. MDGS also released 1H 2021 results on September 20, 2021, which is likely the other reason the volume and price has increased.
$MDGS is an Israeli company listed on the Nasdaq and TASE exchanges. They have partnered and have ownership in a wide variety of different technology companies. I thought their Investor Presentation was rather intriguing and I will have to look through the portfolio companies a little closer. The balance sheet is relatively clean with $29M in cash and $9.7M in total liabilities. The company has mostly funded itself through stock issuances most recently on February 25, 2021 with 3,258,438 ADS at a price of $2.60 and January 11, 2021 with 3,659,735 ADS at a price of $2.30. Aegis Capital Corp was the bookrunner on both offerings. A quick guess would be the portfolio companies are requiring a lot of capital that $MDGS is providing through the stock sales.
The year to date chart is also pretty ugly after the stock spiked in January and February from $1.96 up to $3.50. Every rally has been sold since as the stock currently trades at $1.58 at the time this Newsletter is being written.
Disclosure: I have no position in Medigus $MDGS long or short and was not paid to write this article by anyone.