SEC Suspends Trading in 15 Stocks That Got Hyped on Social Media

(Bloomberg) -- U.S. regulators are engaging in the stock market’s version of whack-a-mole -- racing to suspend shares of companies with dubious prospects that have been hyped to the moon on social media.In a Friday statement, the Securities and Exchange Commission said it temporarily halted trading in 15 companies due to concerns that their stock prices were artificially inflated. One of the companies, a penny stock called Blue Sphere Corp., was recently highlighted in a Bloomberg News story after spiking in value following a barrage of posts on online message boards.“We proactively monitor for suspicious trading activity tied to stock promotions on social media, and act quickly to stop that trading when appropriate to safeguard the public interest,” Melissa Hodgman, acting director of the SEC’s enforcement division, said in a statement.The SEC crackdown adds to the fallout from the GameStop Corp. frenzy, in which an army of day traders banded together to drive long-ignored stocks to the stratosphere. The regulator has routinely sought to remove moribund companies from exchanges because it’s worried about retail investors suffering losses, but that effort has picked up pace amid this year’s wild trading.In Friday’s action, regulators are venturing further into one of the market’s rowdiest districts, targeting penny stocks driven into price and volume frenzies by incessant social media pumping. Frenetic trading, often in profitless companies, on lightly regulated broker networks is perhaps the most extreme example of speculative excess in the 2021 market, a landscape that has also included the SPAC craze and soaring cryptocurrencies.In February, an average of 90 billion shares changed hands each day on venues such those operated by OTC Markets Group -- often called “over-the-counter” securities or the “pink sheets.” It added up to roughly 1.7 trillion shares this month, data compiled by Bloomberg Intelligence show. In December, the total exceeded 1 trillion for the first time in a decade.Blue Sphere is one of many stocks that vaulted from obscurity to viral sensation -- and on any given day there have been a dozen similar stories. Oftentimes, chatter on social media sites like Stocktwits and Twitter and other online chatrooms presages takeoff. It’s happening as retail traders equipped with zero commissions at brokers have swelled to 23% of stock trading volume, up from 20% last year, according to Bloomberg Intelligence.A phone call Friday to Blue Sphere was sent to voicemail.Two weeks ago the SEC suspended trading in SpectraScience Inc. -- a firm that had surged 633% in 2021 to just over two-tenths of a cent before the halt. The SEC’s order noted that while the company hadn’t filed reports in years and its phone number doesn’t work, “social media accounts may be engaged in coordinated attempt to artificially influence” its share price. SpectraScience volume surpassed 3.5 billion shares on a single day in late January as the stock surged 167%.None of the companies suspended Friday have filed any information with the SEC for over a year. Under the federal securities laws, the SEC can prohibit trading for 10 days and bar a broker-dealer from soliciting investors to buy or sell the stock again until certain reporting requirements are met.Here are the stocks the SEC suspended:Blue Sphere Corp.Bebida Beverage Co.Ehouse Global Inc.Eventure Interactive Inc.Eyes on the Go Inc.Green Energy Enterprises Inc.Helix Wind Corp.International Power Group Ltd.Marani Brands Inc.MediaTechnics Corp.Net Talk.com Inc.Patten Energy Solutions Group Inc.PTA Holdings Inc.Universal Apparel & Textime CompanyWisdom Homes of America Inc.(Updates with background on OTC trading)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

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Jim Cramer Shares 10 SPACs 'To Die For'

CNBC host Jim Cramer has been vocal about the rise of SPACs. Cramer has criticized the large number of SPACs and recently went after celebrity SPACs. The host has featured interviews with executives from some of the companies going public via the SPAC route. On Wednesday’s “Mad Money” show, Cramer recommended to that they watch for some high-quality SPACs that are trading down with the entire SPAC industry. “The next time these higher-quality SPACs get hit ... you need to be ready to buy,” Cramer said. “I’m saying you should watch them on the way down because they do break to lower levels.” Here are the 10 SPACs to die for, according to Jim Cramer: MP Materials: Rare earth mining company MP Materials (NYSE: MP) has been a favorite of Cramer's. “It is high quality — I want you ready for the next pullback,” he said. The company could benefit from the push by China to ban exports of rare earth minerals to the U.S. For more on the opportunity MP Materials has, watch Benzinga’s interview with CEO James Litinsky here. Star Peak Energy: Cramer is a fan of Star Peak Energy Transition Corp (NYSE: STPK), a SPAC taking Stem public. “I think you’re going to get an even better buying opportunity once the deal closes.” Cramer said he would be a buyer of the SPAC under $30. Porch Group: Software company Porch Group (NASDAQ: PRCH) helps power the home services market. Benchmark recently initiated coverage with a Buy rating and $24 price target. “I actually think you can start buying Porch right here and maybe wait for a dip to buy some more,” Cramer said. Utz Brands: Salty snacks company Utz Brands Inc (NYSE: UTZ) completed its SPAC merger in August 2020. The company hasn’t received the attention that some electric vehicle SPACs and other industries have commanded. Shares have seen a steady rise in their price going from around $14 at the time of the merger close to around $25 today. “You’re not getting much of an entry point, but if it pulls back to closer to $20, you need to be ready to pull the trigger on Utz,” Cramer said. DraftKings: Online sports betting operator DraftKings Inc (NASDAQ: DKNG) is a favorite of Cramer’s. The CNBC host did clarify that he has a programming deal with the company, saying to take his advice “with a grain of salt.” The company is generating real revenue and growing like a weed, he said. Related Link: 10 Top SPAC Picks For Investors To Consider In 2021 Social Capital Hedosophia Holdings Corp V: The fifth SPAC under the IPOA to IPOZ umbrella from Chamath Palihapitiya is a favorite of Cramer’s due to the merger partner SoFi. Cramer called SoFi “the personalized online banking play that’s disrupted the entire industry.” The company is going public with Social Capital Hedosophia Holdings Corp V (NASDAQ: IPOE). Vertiv: Hardware and software company Vertiv Holdings (NYSE: VRT) is another company that went public via SPAC merger that Cramer likes. “You can put on a small position here, then hope it comes down to buy more,” Cramer said. The CNBC host said the company recently reported a strong quarter. Open Lending: Automated lending company Open Lending (NASDAQ: LPRO) has been a strong performing stock, with shares going from $13 to $40 over the last six months. “The stock is not cheap, but if Open Lending hits the numbers well this thing’s going to look like a steal,” Cramer said. Skillz: Mobile gaming company Skillz Inc (NASDAQ: SKLZ) helps companies monetize their games through offering person vs. person wagering and tournaments. Cramer said Skillz has a great story, and he would be a buyer if it falls below $30. Cramer also noted that Cathie Wood added Skillz to the Ark Funds ETFs. AppHarvest: Indoor agriculture company Appharvest (NASDAQ: APPH) wants to operate the world’s largest indoor and controlled farming portfolio to help Americans have access to fresh, affordable, healthy fruits and vegetables. “The stock’s down 22% from its highs, looking more enticing currently at $33,” Cramer said. “If it falls to the high $20s, nibble.” Photo by Tulane Public Relations via Wikimedia. See more from BenzingaClick here for options trades from Benzinga5 Things You Might Not Know About Churchill Capital's Michael KleinPokemon Announces Highly Anticipated Diamond And Pearl Remakes: Why Investors Should Watch Nintendo Stock© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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