Problems at POET Technologies (POET)
POET Technologies (NASDAQ: POET — $364 million) is designing an “optical interposer” that the company claims “brings value to devices that integrate electronics and photonics, including high-speed networking for cloud service providers and data centers, 5G networks, ‘Internet of Things’, accelerators for Artificial Intelligence systems and sensing applications, such as LIDAR systems.” The company has virtually no revenue and the stock is up ~450% this year with a lofty $10 million average daily trading volume. The Bear Cave believes POET’s rise is based more on hype than substance.
Headquartered in Toronto, POET was originally incorporated in February 1972 as Tandem Resources, an exploratory diamond mining company that went through a series of several mergers, acquisitions, and divestitures to ultimately become an optical interposer development company. POET has virtually no sales from its products and in its most recent annual filing disclosed “an accumulated deficit of $214,291,025” and added, “Our auditors have expressed substantial doubt regarding our ability to continue as a going concern.”
Earlier this year, POET engaged LFG Equities which claims to have “a 2500+ influencer network covering platforms such as YouTube, Twitter and Discord,” “media connections to over 100+ different sites and 200+ writers,” and newsletter and text services “with partner lists as big as 500k subscribers.” A Google Doc agreement linked in the disclaimer of one paid POET YouTube video shows that POET paid LFG Equities for at least three campaigns.
POET stock increased ~137% in the two weeks after the April 18 agreement, increased ~75% in the two weeks after the June 20 agreement, and increased ~40% in the two weeks after the September 16 agreement.
On April 21, 2024, three days after POET’s April 18 agreement with LFG Equities, the popular YouTube investing channel “Ticker Symbol: YOU” posted a video titled, “Top 3 AI Stocks I’m Buying Now As Nvidia Stock Crashes.” One of the three stock picks was POET (along with Broadcom and Qualcomm) and the video disclosed, “A portion of this video was conducted on behalf of Poet Technologies and was funded by a third party.”
The April 21 video has been viewed over 165,000 times and POET stock doubled in the three days after its publication. The Google Doc disclaimer linked in the video’s description says LFG Equities paid “Ticker Symbol: YOU” $22,500 “to perform social media strategy and consulting services on behalf of POET Technologies.”
Below, volume and price spikes around the same time as the three paid POET stock videos:
Some of the promotional activity discussed in The Bear Cave was identified earlier this week in a wide-ranging investigation by The Plain Bagel covering dozens of stock promotion schemes.
A second June 26 video titled, “Top 3 Ai Stocks that are Better than Nvidia (Still Early!)” highlights Oracle, C3 AI, and POET Technology as the top picks. The host shows a trade confirmation onscreen after he purchased 1,000 POET shares and the video description disclosed,