World's Worst Corporate PR

For those of us who enjoy clear, engaging, meaningful writing, reading corporate PR every morning is about as appetizing as following the hound with the plastic mitt on my hand.

In the recent past, I've pilloried companies as varied as Coca-Cola (NYSE: KO  ) , Colgate-Palmolive (NYSE: CL  ) , and WiMax blimp-hawkers GlobeTel for their PR gaffes. Just this morning, I came across a plate of tripe courtesy the good people at Data I/O Corp (Nasdaq: DIOC  ) and Intel (Nasdaq: INTC  ) .

"Data I/O Corp. announced a global alliance with Intel Corp.'s Flash Memory Group to deliver higher value to their mutual customers. The two companies will offer integrated solutions to reduce time-to-market and facilitate easy adoption and manufacturing."

Sounds way too much like that classic Onion headline, "'I Provide Office Solutions,' Says Pitiful Little Man."

Unfortunately (or fortunately, depending on your appreciation of ridiculous corporate PR), neither the Intel PR nor that Onion spoof have anything on what I believe is the world's worst corporate PR.

Sent to me by an alert reader, this message comes courtesy of a miserable little penny stock, which I will not name, lest the company's share somehow rise as a result of getting the attention it so desperately seeks but does not deserve.

Here are the first couple of paragraphs of the PR. Names have been omitted to protect the naive.

[PennyStock] Uses Optional Web Movie for "Doctors-Versus-Bankers'' Compromise

(BUSINESS WIRE)-- [Pennystock] an emerging growth biotechnology company, has placed a short movie clip (4.8 MB) on its web site at [www.notarealaddress.com.] The movie can be downloaded and played by clicking on a link that appears on the Company's Home Page. This can also be accomplished by clicking on the Company's logo, which appears on every page of the website. However, the movie clip will not be downloaded or played unless a visitor opts-in for the movie.

According to [Pennystock's] CEO, today's investment bankers expect corporate websites to dazzle the investment community with a Flash movie that plays immediately when a browser goes to the corporate site. Yet, surveys have consistently shown that adults often use the Internet as a reference source and may find the Flash movies a nuisance if not an irritant.

"Today's investment bankers expect corporate web sites to dazzle the investment community?" Allow me to offer my translation of this strange contention.

"The kind of sharks who would invest institutional money in my money-torching penny-stock expect a Flash movie to dazzle those naive, individual penny-stock speculators who believe that visiting a website constitutes sufficient due diligence. This is not really news, so we have tried to make it seem like news by giving you a lengthy explanation, in the hopes that a few more gullibles will give us some attention."

Harsh? Hardly.

This microcap, whose stock has crashed from $3 a share to $0.90 over the past year, shows revenues of zero. It has only three full-time employees, including the CEO, his daughter, and another. The firm, which purports to have products that could treat AIDS, admits, "In the last two fiscal years, there have not been any research and/or development expenditures by us or our predecessor companies," and it appears not to have a single doctor or researcher on staff.

Let's just say, I don't think Bristol-Myers Squibb (NYSE: BMY  ) or Gilead Sciences (Nasdaq: GILD  ) are shaking in their boots. There's little going on here except PR. And it's bad PR at that.

But unfortunately, even bad PR can dupe investors. Just look at the semi-literate ramblings of Conversion Solutions Holdings' recently-ex-CEO Rufus Paul Harris, which carried this penny stock disaster from $0.50 to as high as $4.00 per share this year before the SEC dropped the hammer, halting the stock and filing suit on a variety of complaints. Today, it trades for less than $0.50, and I'm pretty sure it'll trade for less than a nickel before we see the end of the slide.

Amusing, but scary. That's the lesson here. Invest (or don't) accordingly. And if you think you've seen PR that can top this one, please send it my way. Prize for the worst entry will be the last few Tootsie Rolls at the bottom of my Halloween pumpkin.

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At the time of publication, Seth Jayson had shares of Intel, but no positions in any other company mentioned here. View his stock holdings and Fool profile here. See what he's Digging these days. Intel, Coke, and Colgate-Palmolive are Motley Fool Inside Value recommendations. Fool rules are here.


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