When it comes to stock trading, especially small cap, less traded stocks, any tidbit of news can send shares soaring in one direction or another. For MagneGas Corporation (NASDAQ:MNGA), this appears to be happening today. At 12:00 PM, ET, an article was published on a website called ValueWalk and SeekingAlpha claiming that the stock is “overvalued by -92.9%”, and that the company is taking part in a “Paid Stock Promotion”. It also goes on to claim that there is an ongoing investigation and co-founders Bo Linton and his partner Albert Reda have been jailed on fraud.
However, as the stock has plummeted today, MagneGas Corporation (NASDAQ:MNGA) has filed an 8-k stating that the aforementioned article was written by “an anonymous short seller” in the compay’s stock, basically claiming it was written to purposefully cause shares of the company to tank.
“The website does not contain the article author’s telephone or other contact information but does clearly state the author is a short seller,” MagneGas Corporation (NASDAQ:MNGA) explains. “The article contains multiple instances of materially false and misleading information. The Company has referred the matter to its legal team and is exploring all available legal options.”
if in fact this is true, activity highly illegal, and could have the article’s author hot water discovered. it should be interesting to follow story. writer actually stating truthful facts? while doubtful, isn’t out of realm possibility. — or magnegas corporation (nasdaq:mnga) correct asserting that just a reverse “pump dump” by short seller shares?
The stock is down 18.64% or $0.35 following the news, hitting $1.53 per share. About 10.98 million shares traded hands or 480.95% up from the average. mnga has risen 42.42% since May 18, 2015 and is uptrending. It has outperformed the S&P500 by 44.69%.
MagneGas Corporation is an alternative energy company. The company has a market cap of $77.50 million. The Firm creates and produces hydrogen alternative fuel through the gasification of carbon-rich liquids, including certain liquids and liquid wastes. It currently has negative earnings. The Firm has two products: a fuel called MagneGas and the machines that produce that gas known as, Plasma Arc Flow System.