The electric-vehicle revolution is propelling impressive gains in commodity and equity prices around the world, few more dizzying than Liberty One Lithium Corp. The penny stock, which has changed its name twice since 2016 and is years away from an operating mine, surged 250 percent in October, when both the price of lithium and a benchmark of producers posted single-digit returns.
Along with receiving permits to drill in Argentina and rising commodity prices, Liberty One has been boosted by Pyronix Media, one of a number of companies paid in cash and stock to sing the praises of clients through email, websites and social media. Such online promotions have led at least one U.S. exchange to change its disclosure rules.
“There’s a lot of hype and expectation that probably will never be realized, and it’s very hard for small investors to sort those out,” Joe Lowry, a lithium industry consultant and former FMC Corp. executive, said by telephone, without referring to specific companies. “Drilling a few holes doesn’t constitute an ore body. But that doesn’t stop them pumping the stock.”
Canadian and U.S. securities rules prohibit issuers from making misleading or untrue statements. As long as they’re true and properly disclosed, paid promotions are fine.
One piece published on Stock.Report raised concerns at OTC Markets Group Inc., the U.S. over-the-counter exchange on which Liberty One trades. Entitled “Liberty One Lithium Delivers For Members!” it was published online in October and referenced steep gains by three other lithium companies, predicting: “Liberty One Lithium could be ready to join those ranks especially after what we’ve seen so far!”
The article, which includes a pay-to-publish disclaimer in small print, has since been deleted from the Stock.Report website along with another titled “Huge Opportunity Ahead With Liberty One Lithium.”
For the rest of this article: https://www.bloomberg.com/news/articles/2017-12-21/lithium-rookie-posts-dizzying-gain-as-promoter-plugs-penny-stock