BlastGard International Inc. (OTCMKTS:BLGA) Sobers Up
Ever since Leonardo DiCaprio portrayed Jordan Belfort in what has to be one of the biggest blockbusters from the last few years, the nickname “The Wolf of Wall Street” has been used in a variety of forms, by a variety of individuals, for a variety of reasons. When they set themselves the task of creating a new newsletter, for example, the people behind Epic Stock Picks decided to name it “The Wolf of Penny Stocks”. They then went to great lengths to popularize it and the volume logged by BlastGard International Inc. (OTCMKTS:BLGA), The Wolf’s first ever pick, shows that all the pop-up ads and banners have paid off.
Well, when we say “paid off”, the pumpers haven’t actually received any money for BLGA‘s promotion, but despite this, the ticker went through two interesting sessions. First, on Thursday, it shot up and after more than doubling its value, it stopped at $0.027 on a truly astonishing dollar volume of $562 thousand. Sadly, the end of the week wasn’t quite as fun. The volume dropped dramatically on Friday (which, considering the historical lack of liquidity, is a rather big worry) and BLGA lost more than 37% of its value, closing the day at $0.017 per share.
So, we’ve already seen the ups and downs that are usually associated with promoted penny stocks. But where will BLGA go next?
The caveat emptor badge that is adorning the company profile at the moment suggests that the people policing the OTC Markets aren’t convinced in the stock’s success. The skull and crossbones sign was placed mere hours after the pump began and the performance from Friday shows that it managed to scare some of the investors away.
Many of you will probably say that the whole pump commotion is a really big shame because BLGA is actually a working entity with a relatively solid business. And indeed, once you open the latest 10-Q, you’ll see that the company is selling its products quite well. Here’s a summary of the most important figures:
- cash: $73,702
- current assets: $2,216,942
- current liabilities: $1,911,906
- quarterly revenues: $693,023
- quarterly net loss: $464,416
The revenues are significantly higher compared to the ones logged during the same period of 2014, though it must be said that on a sequential basis, things aren’t quite as optimistic. The management team did say in the 10-Q, however, that they expect to ship at least $2 million worth of protective gear under some new purchase orders that are supposed to be closed during the second half of 2015.
But is the potential increase in sales really a good enough reason to invest in BLGA?
That’s up to you to decide. While you’re contemplating the risks, however, you might consider one or two things.
As we hinted in our second paragraph, the stock hasn’t really been among investors’ favorites. In fact, although the company has been logging some solid sales figures for quite some time, nobody was really paying attention before the pumpers came along and started the touting. Bearing this in mind might not be a bad call and the same goes for the fact that some warrants exercisable at $0.009 apiece could put additional pressure on the price.
Last but not least, if you haven’t seen Martin Scorsese’s Wolf of Wall Street, we strongly recommend that you do watch it. It might just give you an idea of what sort of characters make a living out of recommending various penny stocks through the email.
