The $2.2 Million Pump for NuGene International Inc (OTCBB:NUGN) Crashes

For 47 sessions in a row the stock of NuGene International Inc (OTCBB:NUGN) climbed up the chart with registering even a single session in the red. If you think that such a performance seems too good to be true you are definitely right – reports of a hard mailer brochures being distributed to investors’ mailboxes have been coming in for weeks now.

The paid pump has a disclosed budget of $2.28 million paid by Result Corporation, a third party shareholder of NUGN. The goal of the promotion was stated clearly – “Result Corporation fully intends to sell their shares without notice into this Advertisement/market awareness campaign”. And the profits they could reap were indeed massive with the artificial hype pushing NUGN to a high of $4.54 registered on Tuesday.

The shares that they intend to sell during the promotion are more than likely the free trading shares we warned you about in our previous articles. In March 2014 NUGN sold 148 thousand shares and received $37,050 in proceeds. As a result of the two forwards splits effected since then though the people who bought those shares now owned 11,144,640 shares with a split-adjusted price of $0.0033.

Although the pump has been going on for quite a while without any reaction from the management team of NUGN on Wednesday a PR about it was finally issued. In it NuGene state that they have been requested by OTC Markets to comment on the promotional activity around their stock. With the involvement of OTC Markets now officially announced the risks around NUGN got even greater – the people behind the pump could decide to dump a huge amount of their underpriced shares and walk away. This is exactly what happened during yesterday’s trading.

NUGN opened the session at $4.305 and for the first couple of hours remained relatively stable. Right before noon though the ticker began sinking like a stone wiping huge chunks of its share price in a matter of minutes. NUGN failed to recover and by the time of the closing bell it was sitting at $2.61 for a loss of nearly 40%. The unprecedented amount of 2.7 million shares got traded with the majority of the volume being dumped during the stock crash.

The devastating session could indicate that the pump is coming to an end. If the stock is left to move on its own even more corrections could follow as the company may struggle to support its current market cap of over $100 million.