Respect Your Universe, Inc. (OTCMKTS:RYUN) – Another Pump Gone Wrong
Respect Your Universe, Inc (OTCMKTS:RYUN) has been going down the charts for quite a while now. The recent paid promotion managed to provide 2 sessions in the green and a climb above 10 cents, but a serious correction from yesterday obliterated all the gains.
Promoters of all shapes and sizes touted RYUN‘s stock starting on December 3. The compensations were ranging between $4.5 thousand and $20 thousand and the whole effort proved why you shouldn’t fall for promoted tickers.
Yesterday, RYUN dropped a hefty 38% on the highest volume of traded stock that it has registered in more than 2 years. The stock closed the session priced at $0.0766 with a massive 2.4 million shares switching hands that generated $245 thousand in dollar volume.
Despite being in a decent financial state the company doesn’t really back up its $4.8 million market value as you can see from the numbers of prime interest from their quarterly report for the period ended September 30.
- cash: $213 thousand
- current assets: $1.8 million
- total assets: $2.2 million
- total current liabilities: $559 thousand
- revenues: $216 thousand
- net loss: $1.1 million
Despite the fact that the third quarter of this year didn’t differ that much from 2012’s, the overall 9 month situation is considerably better. The company has managed to increase its revenues for the 3 quarters of 2013 by a good 116% and has reduced its net loss by 42%.
Despite that, RYUN remains to be incapable of operating at a profit for now. There are simply too much general and administrative expenses, which dwarf the generated revenues.
The paid promotion wasn’t enough to cause a longer upward run, which doesn’t surprise us. Looking back at some of the promoters’ previous picks we are not amazed that it unfolded so quickly. Stock Brain, for example, promoted Global Gaming Network, Inc. (OTCMKTS:GBGM) on December 3 and their stock crashed yesterday.
In any case, be sure to do a lot of due diligence and weigh out the risks, especially when dealing with pumped stocks.
On the bright side of things, Cloud Security Corp. (OTCMKTS:CLDS) closed yesterday’s session with a decent 32% gain on a high amount of traded stock.