A penny stock, Options Media Group Holdings (OPMG) has been soaring on unusually high trading volume after the news that a teen pop singer, Justin Bieber, will be a part of the company's new marketing campaign.
The company is currently a small stock, maintaining trading levels of only pennies per share. Nevertheless, if the stock rallies as investors learn of Bieber's involvement in the company's automotive product, it would not be the first time that a celebrity influenced the price of a penny stock.
Just last January, rapper "50 Cent" appeared on CNBC at the Consumer Electronics Show, promoting a new brand of headphones. He also spent that entire weekend tweeting about the company's stock. The endorsed company, H & H Imports (HNHI), saw its stock rise 240% in a matter of days.
OPMG has seen the exact same performance since the news of Bieber's upcoming endorsement. Indeed, during the last week, OPMG has rallied just over 240%.
Justin Bieber's involvement with this penny stock is not without significant criticism. Timothy Sykes, in a research report posted on his website, points out the fact that Emerging Growth Research (a penny stock promoter) disclaims an ownership stake of four million shares of OPMG stock. In addition to this dubious relationship, Sykes goes on to note that OPMG saw "annual losses of $10 million" while the company only has "enough cash to last for roughly 45 days more (June 30th, 2011)." Sykes raises several other concerns with OPMG, and maintains skepticism that the stock will achieve enduring success, despite a brief period of notoriety accompanying Bieber's endorsement.
Bieber will support a product created by OPMG that allows parents to set up their children's cell phones to not work when in a moving vehicle. Bieber does have a financial interest in the performance of OPMG stock. The automotive product is expected to launch on June 6, 2011.
It should be noted that Options Media Group Holdings is in the process of changing its corporate name to PhoneGuard, The stock currently trades on the pinksheets exchange under the symbol "OPMG."