Lot 78, Inc. (OTCBB:LOTE) Soars to Unbelievable $8 on Paper Mailer
In the past three days, Lot 78, Inc. (OTCBB:LOTE) took a leap, reaching $8, and the climb to unseen levels was so staggering that we could easily call it a leap of faith. With examples of fashion companies jumping to $20 on international fame, LOTE seems to try for this scenario, more than doubling in price in the past three days. Unfortunately, the company has lost some credibility among analysts, who believe it is mostly hype and hot air. Also, LOTE showed on April 24th that it could fall on selling as nervous investors leave what they believe is a high enough price.
And now LOTE has to deal with an unauthorised listing on the Boerse Berlin Stock Exchange, which the company expects could cause a rush of naked short selling and quickly depress the price. How this listing will affect the stock price is unknown, but so far enough owners hold LOTE to be able to depress the ticker to the ground if they decide to take profits.
Currently, LOTE is in a price range which even the raw charisma of its founder, Ollie Amhurst, and his high hopes and bullish statements may not be able to keep up. Still, LOTE tried to repeat the climb of True Religion, a brand that gained popularity and took its stock up to $20.
We don’t know how many garments LOTE will manage to sell, but its vehicle company left the following financial strengths and weaknesses:
- Zero revenues
- $38,000 net loss
- Zero cash, $1,000 “goodwill” assets
- $84,000 total liabilities
But the real success of the stock lies in a series of emails and even a printed mailer, promising 5,300% returns. The mailer comes from Smallcap Fortunes, and the campaign reveal s a budget of up to $2.5 million, which may reach enough households to keep the rise for a few days more. The mailer, titled as a report from Breakaway stocks, looks a bit too colorful to be a legitimate analysis. In addition, LOTE is regular with self-promotion through press releases.
With a mailer and noise still making the rounds, LOTE may deliver a few good days more, but a large correction is expected soon, to wipe out most of the gains since the ticker started trading at $1.50. Keep this risk in mind and don’t expect the past performance of LOTE to translate into continuing future gains.