The Hard Mailer Pump for NuGene International Inc (OTCBB:NUGN) is Still Active
NuGene International Inc. (OTCBB:NUGN) is definitely not among the typical pennystock ventures. The company has real products and through them is generating impressive revenues. The fact that none other than Kathy Ireland is involved with the company puts NUGN even further apart from the majority of the other pennystocks. The balance sheet is also not that bad – NuGene finished the first three months of 2015 with:
• $619 thousand cash
• $1.34 million total current assets
• $305 thousand total current liabilities
• $481 thousand sales
• $240 thousand net loss
In addition the company has sponsored several independent clinical studies of its products and the results have been more than encouraging. In a new PR issued yesterday NUGN announced that their line of products has been selected by the e-commerce store LovelySkin.com.
With so many positive aspects you might be inclined to think that NUGN is a rather safe bet for an investment. That, however, is not exactly the case. During the June 9 and 10 sessions the stock of company passed through $4.50 per share, valuation that is way too inflated for the stock. What was the reason behind the incredible surge up the chart – a multy-million paid promotion.
The stock has been touted for nearly a month by hard mailer brochures (part 1 and part 2). The paying party for the campaign is disclosed to be Result Corporation, a third part shareholder of NUGN. The initial production budget they provided was $2,280,000 million but more recent disclaimers state that the budget has reached $4.4 million. The disclaimer also reveals that Result Corporation fully intend to sell their shares on the market thanks to the increased awareness created by the pump. The shares that are more than likely being liquidated into the promotion are the 11,144,640 free trading shares that have a split-adjusted price of $0.0033.
On June 11 NUGN already suffered a devastating crash when it wiped close to 40% of its value by the end of the session. Thanks to the still ongoing paid promotion the ticker has been slowly climbing back up the chart and after gaining another 5.76% yesterday it now stands at $3.67. This means that currently the company has a rather unrealistic market cap of more than $145 million. Without the artificial hype of the pump such a market capitalization will be nearly impossible to support.
NUGN could crash without a notice once more and the people behind the promotion could decide to move on to their next target. If this happens and you miss the right moment to shed you holdings the losses could be staggering.