A version of this article was originally published on October 21, 2019, but the ad continues to circulate and generate new questions so we have updated it to address any changes over the past six months.
Hard to believe that the major publishers didn’t already have something called The Penny Stock Letter, but this is the first time I’ve seen the title — it’s an entry-level newsletter from Tim Bohen at Paradigm Press, one of the many publishers in the Baltimore Agoraplex, and they’ve been promoting it for more than six months now with a big teaser campaign now that hints at “The #1 Penny Stock of 2020” … so that’s our topic for today.
The latest version of this ad, which I received on June 16, 2020, highlights the Jeff Bezos connection…
“Jeff Bezos, owner of Amazon and world’s richest man has officially invested $151 million into a tiny $6 Silicon Valley stock.
“Could it be because this tiny company is set to end the biggest killer in human history?”
But other than the stock price, which in recent versions says “you can buy in at just $5 per share” and was previously touted as “shares are dirt cheap at just $6”, there haven’t been many changes to the meat of the ad in the past year — and if you have the endurance to make it to the end of the pitch, it’s still dated July, 2019.
The only other change they seem to have made is to the actual offer — originally you could have made money from this subscription by not doing anything at all, because they sold it with a guarantee that they’ll refund you $98 on your $49 subscription if you’re not happy in the first six months, a nice, guaranteed 100% return. That’s no longer the case, they still offer a guarantee but they’re not doubling it.
The “guarantee” makes you work for it, by the way… and they get really specific, so I thought it was worth mentioning — here’s what the latest order form says:
“And if you’re not extraordinarily impressed with everything you’re receiving you can follow our simple instructions to request your money back.
“All you need to do is ship back the penny stock course book (physical) with a summary of each chapter so I can make sure you tried it out…
“And also write a letter that explains why you’re not happy with what you’ve received through ‘The Penny Stock Letter.'”
So I’m sure they’re counting on the fact that for most of us, our time is too valuable to do that much homework in exchange for a $49 refund… but still, it’s technically there.
But let’s get back on track, shall we?
They’re peddling a special report called “How to Amass a Retirement Fortune from The Biggest Medical Breakthrough in History,” and the lead-in is enough to get anyone excited:
“Backed by Billionaires: Jeff Bezos, Peter Thiel, Venrock Capital, and BlackRock Inc. Reveals…
“THE #1 PENNY STOCK OF 2020
– It holds the $8.18 Trillion Cure to Man’s Biggest Problem
– You Can Buy In At Just $5 Per Share…
– And a Special August 7th Announcement Could Trigger a Tsunami of New Wealth Across The Nation.”
This is basically the same spiel that every biotech newsletters uses — there’s a cure for X disease coming, it will be announced in a shocking development in a few weeks, and the gains will be life-changing.
I can’t tell you that it never happens that way, but in my experience examining these teaser ads for 12 years now it hasn’t yet happened that way. There tend to be lots of ups and downs in drug development, sometimes you get a big 100% jump or a 80% fall on a great or terrible clinical trial result, but building a biotech holding into something genuinely “life-changing” takes a long time, and a lot of luck and patience.
Which doesn’t mean the stock won’t be worth considering, of course, just that we should start with a little sobriety and skepticism. So what is the stock?
Let’s check the other clues they drop. The ad says that there’s a secret US Patent that was filed to “end the biggest killer in human history,” with the little patent number blurred out to make us think it’s super-secret. Here’s some more from the pitch:
“In just the last year alone this deadly killer has taken 34.6x times more people than heart disease AND cancer… COMBINED.
“And better yet, this affects the lives of all your friends and loved ones….”Are you getting our free Daily Update
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But then there was actually another change to the latest version of this ad… it used to say:
“This Tiny $6 Biotech Firm Has Just Discovered The Cure…
“… what we are projecting will be huge…
“10,343% Returns Starting As Soon as November 7th”
And now it’s a little different…
“This Tiny $5 Biotechnology Stock Has Discovered a Single Groundbreaking Treatment, Bringing This ‘Disease’ to a Screeching Hault [sic]…
“This could be your ticket to a fortune unlike anything you’ve ever had before.
“Returns Massive Enough to Overshadow Anything The Stock Market’s Seen Before…
“Starting As Soon as August 7th.”
So they removed that “cure” word and got rid of the specific percentage returns… still carries the same hype feeling, but I imagine the lawyers like it better now.
And there are some quotes from outside sources that fall into the “other people are also saying it, so it must be real” category:
“I know this sounds nuts, but as Forbes says…
‘The idea behind [this company] sound’s crazy, but it’s backed by dozens of scientific papers.’
“SingularityHub has confirmed the power of this technology, saying…
‘It’s like a 90-year-old human suddenly jumping off the couch and running around the block.’
“Technology & business news, The Hustle, says…
‘Study shows [this tech] could increase the human lifespan by almost 35%.'”
And they dive deeper into those big backers, too:
“Founder of Amazon and the world’s richest man Jeff Bezos has invested $151 million.
“Venrock Capital, started by the Rockefeller family invested upwards of $55 million.
“Billionaire investor and founder of PayPal Peter Thiel is also in.”
What about the company? We get a few more clues:
‘[this company’s team] has collectively moved more than 90 therapeutic candidates into human clinical trials and developed 13 FDA –approved medicines.'”
“The genius behind this company had one (of his many) biotech ventures be acquired for over $2.1 billion.”
So what’s the stock? Thinkolator sez the stock being teased here is (still) Unity Biotechnology (UBX), and the disease they’re fighting is aging. I grow more sympathetic with the anti-aging researchers each year, of course, so I can understand why aging billionaires and venture capital folks love to throw money at the promise of extending the human lifespan — including Peter Thiel, who has invested in a bunch of anti-aging companies (and, yes, is on board with UBX as an early venture investor, along with Venrock and Bezos and others).
Unity Biotechnology is an interesting story — there’s a good in-depth piece here from Quartz that appeared two years ago, before Unity went public. This is a little excerpt:
“The company’s approach is deceptively simple: clearing the body of senescent cells, which are trapped in a state of purgatory between division and death—they’re still alive, but they’re not making new tissues. Cells in this mode are found throughout the body, and research has shown that they can congregate in areas that start to wear with aging, like the eyes and in joints. A recent paper in Science, coauthored by Unity founders Van Deursen and Judith Campisi of the Buck Institute for Research on Aging, demonstrated that, in mice, senescent cells contribute to atherosclerosis, the buildup of plaque in the arteries.”
Unity went public during a happier market for biotech companies, in mid-2018, and is now trading at about $8.50 a share (it briefly got over $20 a share later in 2017, and did bottom out at about $5 during the March collapse, though it’s been above $8 for a month or so). And yes, they are expected to announce their next earnings report on August 7, though the exact date hasn’t yet been confirmed — so that date wasn’t just pulled out of the air by the ad copywriter… but they’re not going to announce shocking results or a “cure for aging” on that day.