Digital Music

Was Qtrax Debut Just A Stock Manipulation Scheme?

Qtrax was the rising star of the music industry on Monday morning. But 24 hours later after all four major labels denied having deals with the company Qtrax was labeled by some as a pariah.

Why would a company fly Don Henley and James Blunt to Cannes for a splashy launch that many estimate cost $1-$1.5 million knowing that the major label deals they were touting were not in place? Some observers see it as a negotiating tactic.  imeem and several other Music 2.0 companies built large audiences without deals in place and leveraged those audiences into additional financing and agreements with record labels and publishers. But none to my knowledge – and certainly not imeem – ever claimed to have agreements that didn’t exist.

Another explanation may be stock manipulation. Qtrax is controlled by Brilliant Tech Corp (BLLN) who’s penny stock has languished at 5 cents for more than a year.  But on Monday rafter the announcement the price almost doubled to 9 cents before falling back to a 4.5 cents after revelations from the label.s  And now speculators willing to gamble that Qtrax will complete the deals have raised the stock to 5.5 cents.

Qtrax has struggled for more than two years to create a model acceptable to the record labels.  Was this a desperation move to return value to early investors? Who, if anyone profited?  These are questions that hopefully will be investigated in the coming weeks.

  • Background and other Qtrax news here.
  • What do you think?
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  1. Stock manipulation schemes are intended to benefit some stock owner. In the case of Brilliant, who would benefit from this price increase? Certainly not management, unless they were actually stupid enough to pull such a stunt. Knowing the SEC would easily prove their claims about the product were knowingly untrue, management would face punishment for such a scheme. Since traders were not the ones to falsely hype the product, they could not be guilty of stock manipulation either.

  2. I think Qtrax is just a company that will never work. Why would they go to all that trouble when they havent finalised anything. It will at least take them another 6 months to a year to actually complete something now. By that time, it is going to be too late.
    Qtrax is a good idea.. but it is not done right, no ipod compatibility, pc only.. the list goes on.. they will be in the DEAD POOL in a year!

  3. wow, another uninformed parrot repeating what they read somewhere else. i’ll say this once, listen up. there is no way that anyone would F with the SEC over 3 cents in one of the most higly publicized OTC offerings in years. get a clue, get a grip…stand your stapler up on end, then smash your forehead into it. you are a wast of space.

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