8-Ks 101
For those who are familiar with 8-K filings and how they're used, you can skip to the next section. For those less familiar with these filings, the SEC says that a "Form 8-K is the “current report” companies must file with the SEC to announce major events that shareholders should know about."
Some of the more common events that require an 8-K filing are bankruptcy, entry into a material definitive agreement, acquisitions, notices of de-listing, amendments to corporate bylaws, and more.
OWC's Recent Filing
The recent 8-K filing from OWC Pharmaceutical Research Corp. (OTC:OWCP) is not like other 8-Ks we regularly come across. The 8-K mentions that on September 11, 2017, OWC Pharmaceutical Research Corp. learned of a "news article" that posted on a website: www.WallStreetWhispers.blogspot.co.
Attached to the filing as Exhibit 99.1 is a copy of the article that reads:
"Pfizer (NYSE:PFE) to partner with OWC Pharmaceutical (OWCP) in new psoriasis and migraine cannabinoid-based therapy trials.
Our source at Pfizer tells us that executives there strongly believe that Pfizer needs to increase it's cannabinoid pipeline to stay abreast of other big pharmaceutical companies who are now entering this sector.
Source tells us that the new Pfizer agreement is a direct result of newly appointed OWCP Board of Directors Dr. Stanley Hirsch extensive contacts in the field. Official details of the agreement are anticipated to be released in October due to NDA currently in place while all the i's and T's are crossed!"
According to the 8-K, OWCP "is not the source of this "news article" nor does the Registrant know who is the author of the posted "news article.""
This caught our attention for a handful of reasons.
- The website could not be less legitimate.
- This rumor has yet to be seen anywhere else except message boards.
- Pfizer has yet to file similarly or comment.
- We've seen this before...
Website Legitimacy
Anyone can easily start a personal blog through Google (NASDAQ:GOOGL)'s Blogger service. Blogs started through this service are hosted on a custom sub-domain of blogspot.com.
The website that posted the article regarding OWCP is called Wall Street Whispers. The blog's sub-title reads "Wall Street Whispers, Rumors, Murmurs, and Buzz!"
There are currently only two posts up - the one about OWCP, and one about Petrogress Inc (OTC:PGAS). The article about PGAS says "All information below is verifiable and comes from SEC filings and official press releases." The one about OWCP obviously does not share this heading.
Besides these two posts, there's nothing else on the site. No contact page, no author information...nothing.
Rumor Unseen Elsewhere
Anyone who's picked up a copy of the Wall Street Journal has seen the section called "Heard on the Street." This section covers what Wall St. is buzzing about as well as rumored takeover bids and more. The site that published this rumor is certainly a far cry from the WSJ. While some Wall Street rumors are founded in reality...those usually come from eavesdropping at P.J. Clarke's after the closing bell.
This rumor on the other hand seems to have come out of nowhere, and simply Googleing the phrase "OWCP Pfizer" comes up with nothing but message board links. Sites like ADVFN's Investors Hub have tons of back-and-fourth regarding the rumor, seemingly like a bullish echo chamber.
Some of the OWCP bulls are saying things like:
"Owcp and Pfizer have something in the making. Owcp is protecting themselves because they don't need people thinking they leaked the news when the deal is announced. Never ever seen this before but it is epic."
While other bulls are going as far as to say things like:
"There can only be one logical reason. Pfizer wanted to keep its interest extremely confidential and OWCP want to officially show Pfizer that they are not the ones who leaked this."
Messages like the ones above are only further fueled by people posting things like "Didn't see a PFIZER Denial." For every 10 posts like the ones above, there's only 1 doubtful post saying things like:
"I just spoke to a very close friend who spent years on Wall St. (and also an OWCP investor) and he thinks 'the whisper' was BS..."
Pfizer Has Yet to Comment
We're not saying the rumor is false, and we're certainly not saying it's true. In an effort to get to the bottom of this, we've reached out to the investor relations representative at Pfizer, but have yet to get a response. With that said, one might have expected a similar 8-K denial from Pfizer if this "new story" even made it onto their radar.
We've Seen This Before
Back in 2015, there was an article out claiming that "Teva, according to a report by The Marker, has made an offer for One World Cannabis (OWC) to purchase the rights to the company’s patents."
That rumored deal obviously didn't come to fruition, and it certainly bares a unique resemblance to this one. While OWCP didn't issue an 8-K to deny the aforementioned 2015 rumor, there are still obvious parallels.
OWCP aside, using fake buyout offers to pump a stock are more common than one might have expected. In 2015, a fake P.E. firm "calling itself PTG Capital Partners disclosed in a regulatory filing that it had offered to buy Avon for $18.75 a share." The same Bulgarian man behind the fake Avon bid pulled a similar move to pump up shares of Rocky Mountain Chocolate Factory (NASDAQ:RMCF) before being charged by the SEC. The same sort of thing happened with shares of Twitter Inc (NYSE:TWTR) when a lookalike Bloomberg piece reported that "the company received a $31 billion buyout offer."
Conclusion
To reiterate what was stated earlier - we're not confirming or denying that this deal with Pfizer is true. The purpose of this article was to further highlight the need for proper due diligence when investing in cannabis-related stocks.