GrowLife Inc (PHOT)

[Alan Brochstein]

I think your view is rather extreme. Like everything in life, the truth lies in the middle. I think that incorrect crap on a message board does impact penny stocks (both negative and positive), where the vast majority of investors are using the MB as their primary source of info along with press releases. Penny stocks don't exactly have CNBC updates! No one reads about them in the Wall Street Journal either.

Kurt is a fantastic asset in my view. I have gotten to know him rather well. I think he does EXACTLY this:

devising a pr strategy of press releases & journalism placement that garners this company positive investment attention

Many of you may be excited about the Grass Roots Research effort. I don't want to spend a lot of time criticizing it, but I will point out that it proceeded Kurt's arrival as outside I.R. What is that everyone likes? That it puts a huge number of .22 and now .23? Is there something in there that investors didn't already know? Did anyone not expect paid research to be positive?

There are lots of trade-offs in penny stocks - companies have to get attention somehow. Many cheat and lie. Others take short-cuts with promotion and paid research. I applaud the way Sterling Scott has gone about it, though I would bet that he is happier with hiring Integrity Research than in contracting with GRR. I really enjoyed working with him to bring some new information out and to help tell the story (my interview in SA).

I think that this is one of the most attractive plays in the space, and I make no secret about that. I don't go around telling people that they have to buy it or that it's going to double or more, and, trust me, I will keep Sterling's feet under the fire with respect to financings. Unfortunately, it's hard to justify based on current financials the prices many here seem to think it should trade. There is a huge mistake in the GRR piece in my view that brings into question that .23 target in my view, but when exactly is that .23 target supposed to be achieved? Also, did anyone notice that GRR rates as a buy 96% of its companies that it researches?

I would focus on the technicals, which look good to me, the underlying business model, the backgrounds of the people involved and the most likely fantastic opportunities ahead in the space. To me, while today's numbers don't make PHOT look like a steal, if the company executes in this growing market, then investors, like Sterling himself in a big way, will make money. When I compare PHOT to some other companies, the relative value really jumps out. Sorry we can't talk about these here due to TOS.