Fuse Science, Inc. (PINK:DROP) Takes a Nose Dive on Heavy Volume

Fuse Science, Inc. (PINK:DROP) generated surprising volume on Monday, but it was a turn for the worse, as the price slumped at the open and managed only a minor recovery, closing the day 12% down.

After going through a series of surges fueled by news releases and media exposure the company gained, the stock has had a mostly hard time in March, with a single green close in the second half of the month. Yesterday the downward movement was in double digits, a first in two months’ time. The slump happened on zero news issued by the company and no new filings over the last few days.

DROP surged in early March on news that its CEO would be interviewed alongside Daymond John of FUBU fame. From that point on it’s been a downhill ride for the stock price. DROP‘s latest quarterly report for Q4 of 2012 contained the following:

• $303 thousand in cash
• $1.1 million in current liabilities
• $40 thousand in quarterly revenue
• $2.1 million in net loss

Even though DROP is starting to slowly ramp up its revenue, generating $40 thousand in a quarter, compared against $105 thousand in their whole fiscal 2012, the company is still generating losses. In early March DROP also issued convertible notes for an aggregate amount of over $2 million.

With 13 million shares changing hands yesterday and the stock dropping nearly 2 cents, to arrive at a value that is almost 40% down from the beginning of March, investor confidence may be somewhat shaken. To the company’s credit, they appear to be genuinely trying to run a normal business and have not been targeted by promotional email campaigns in 2013. What may be considered a more unpleasant side of the story is that the significant surges in stock price seem to be connected with an event or person external to the company’s business.