Recall Studios Inc (OTCMKTS:BTOP) Gets Pumped

Sometimes, you see a stock chart and can rapidly recognize that something is going on. We are referring to incredibly high stock returns, very large or very low volume, and also very large volatility.

We felt like this very recently after checking the chart of Recall Studios Inc. (OTCMKTS:BTOP), a virtual reality operator.

Have a look at it here and form your own opinion:

4 years chart for BTOP

What did we see?

The following facts have drawn our attention. In 2017, very few shares changed hands, which shows that a few market participants operated in the market. In addition, some days the share price did not even move, so the chart line is not continuous. This is a strange behavior.

But, the best came some months later.

After very low volatility in 2017, we can see how the share price volatility skyrocketed in January 2018. On January 24, 2018, the stock price increased astonishingly from $0.5 to hit in a first impulse the 52-week highs of $4.0 and closed at the $1.5 mark. Please notice that the stock price increased by 700% and then decreased more than 66% in the same day. The trading activity seems frenetic for a stock that was moving very little a few months ago. Furthermore, the number of shares that changed hands was also not normal; more than 0.5 million shares.

Have a look at the following 1-month chart:

1-month chart for BTOP

The abnormal share price action interested the team very much, thus we commenced an investigation to understand the origin of the volatility. We rapidly thought that the stock was being manipulated, but we had no proof of it.

Read this article until the end to see what we found.

Brief History and Most Recent Developments

Recall Studios Inc. was founded in 2009 and is currently headquartered in Boca Raton, Florida.

The company commenced its operations in the virtual reality industry after announcing it on August 8, 2017. Alexander Bafer, the company's CEO, said the following about the new plans:

"As for the Company, this sale enables us to more closely focus on growing our virtual reality and new media technology subsidiary, Recall Studios. We intend to penetrate this fast expanding market with state-of-the-art 360 technology for the masses that makes entering the virtual reality world easy, affordable and more accessible. The burgeoning virtual reality and new media markets represent the next potential super high growth sector in technology and entertainment." Source

The announcement made the share price increase incredibly in August. From below $0.5, the stock price jumped to hit the one-year highs of $2.00. It made sense because the AR industry is growing at a high pace. Additionally, a new business plan for BTOP means more revenue opportunities.

We understand the excitement of market participants, but we don't appreciate the fact that the trading volume remained very low after releasing interesting news. In addition, the stock price was pulled back to the $0.5 mark. It was suspicious.

We needed to wait until 2018 for getting to know more information.

On January 24, 2018, the company released that soon it would be launching three new products. Very little information was given about the new devices; only that it would "give anyone, anywhere, the power to create their own immersive and interactive experiences without the need for specialized hardware."

In addition, the market noticed that BTOP had entered into a letter of intent with Coatsink Software to jointly develop advancements in AR and VR gaming. At the same time, the company reminded that the CEO, Alex Bafer, had decided to resign and Frank Esposito had been appointed as Interim CEO.

We don't appreciate CEOs and companies that say to have an innovative business plan and then decided to leave.

Regarding the share price reaction to this new information, we believe that the market overreacted to the announcement. We also believe that the trading volume was quite large. We cannot understand how the company can go from moving almost no volume to move more than 0.5 million shares only by releasing that three products would be launched soon.

Something else seemed to be creating a lot of market expectations.

The Stock Promotion: "BTOP Stock Could Skyrocket (614% Upside)"

On January 24, 2017, the market received an email from stock promoter pennypicks.net. In our opinion, the business of the company was overstated in that email, which was the origin of the part of the spike in the share price and the astonishing volume.

Check the following comments and form your own opinion:

• "BTOP Stock Could Skyrocket (614% Upside)"
• The names of Facebook, Netflix, Amazon, Microsoft, Google, and YouTube appeared in the email. The company is not a direct competitor of these large caps, thus we believe that using those names could confuse the market.
• The stock promoter noted that easy profits could be made: "I believe we could be setting up for the next big upward swing and that could mean easy profits of over 100%, so get ready."
• The email obviously did not mention that the company has not presented any VR product.

Conclusion

Currently trading with a market cap of $176 million, BTOP is an interesting story among small caps that could end badly.

The company has already accepted in a press release that a third party could be behind the stock promotion. BTOP's management obviously noted that they have not collaborated with the stock promoter, and the main stockholders have not sold or acquired shares during the promotion.

Fair enough, but we believe that the stock price may have been inflated by the work of promoter. Please remember that if promo dollars dry up, the demand for the stock could diminish. The share price could fall back to $0.5, so buyer beware!

We will be updating our subscribers as soon as we know more. For the latest updates on BTOP, sign up below!

Disclosure: We have no position in BTOP and have not been compensated for this article.Image courtesy of kassie via Flickr