You can watch the ad here. The narrator advises viewers that "Rudy (OTC: RUNU), in the $5.4 billion sports drink industry is a prime buyout, just like The Coca Cola Company (NYSE: KO) bought Vitamin Water."
There's no disclosure in the television ad or in the video, but the "disclaimer" page on the PirateStockTV website contains this disclosure:
Companies featured at www.alphatrade.com pay consideration, which may include cash and/or shares of stock, to APTD for creating and displaying advertisements on it's websites and, in some cases, for building websites. When APTD receives shares as compensation for advertising or website creation for a featured company, APTD may sell part or all of any such shares during the period in which APTD is performing such services. APTD's advertising services for a company may cause the company's stock price to increase, in which event APTD would make a profit when it sells its stock in the company. In addition, APTD's selling of a company's stock may have a negative effect on the market price of the stock. All statements and expressions are the opinion of the companies featured and are not meant to be a solicitation or recommendation to buy, sell, or hold securities ... APTD has been compensated in free trading shares of common stock, available for public trading as follows: two hundred thousand free trading shares of Rudy Nutrition, Inc. from a third party shareholder. To date, APTD has not sold any of the shares. (emphasis added)
The problem is that this disclosure may be inadequate. You have to dig around the site quite a bit to find that disclosure and anyone who just saw the ad on TV would not have been aware of this conflict of interest.
Legal issues aside, I would advise investors to stay very far away from any stock that appears to be the target of a concerted publicity campaign. You just don't find great investments in paid advertisements on CNBC, and I can not find any 10-Ks or 10-Qs filed with the SEC for this company.
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Reader Comments (Page 1 of 1)
3-30-2008 @ 4:16PM
tim said...
LOL, remember the movie Rudy--thats his company nowadays! Rudy! Rudy! Rudy! Zac, just let the pumpers be if they do their jobs correctly, we'll all soon be able to profit for short sellling into the hype created by CNBC commercials. Don't knock CNBC, they need to keep raking in $, if you want ethics, you'll have to leave finance. Welcome to the battlefield
Tim
http://www.timothysykes.com