InterCloud Systems (ICLD) stock dropped nearly 30% today after the Rosen Law Firm announced that it is investigating potential fraud in the security, alleging that insiders may have paid outside parties to pump the stock.
The investigation alleges that authors John Mylant and “Kingmaker” published glowing articles on Seeking Alpha regarding the company which helped the stock rally from $2.55 on November 14, 2013 to $18.13 on January 15, 2014. The authors claimed they were not paid by InterCloud, but a recent article published on March 13, 2014 on Seeking Alpha outs the authors as paid pumpers, working for the stock promotion group, DreamTeam Group. Full details of the investigation can be read here.
ICLD’s financial strength is rather lacking. The cloud-computing specialist has total assets valued at $18.6 million while liabilities come in at $26 million. InterCloud has $3.35 million in cash and is currently valued at $47 million. After skyrocketing 120% in 2013, ICLD shares are now down 60% in 2014, settling today at $7.35 a share.
Category: Stock Fraud