Lot 78, Inc. (OTC:LOTE) Hits Plateau, Tides Threaten to Turn

The stock of Lot 78, Inc. (OTC:LOTE) so far has been following the golden rule of successful polar explorers- march 20 miles a day in all weathers. The slow progress has taken LOTE to a peak of $1.66 and investors hold several million shares, eager for more news from the fashion label. In the past few days, the stock added around 10%, but on Thursday the climb was just below 2%, the trend seems to be flattening.

LOTE promotes itself the best way it can- by touting the spread of its fashion label, a collection of high-end urban clothes. The newest press release dated March 28th cites yet another fashion shop that offers Lot78, a not unusual feat in 2013, where websites easily aggregate fashion offers.

With the end of March approaching, the total payment for promoting LOTE in a series of emails reached $112,600. The promoters’ emails tout the company’s distribution capabilities, which as we said are little more than web aggregation. So far, LOTE has been using former Bold Energy, Inc with the ticker BOLD as a vehicle to gain exposure to the American OTC markets. The previous entity has not yet reflected the contributions of Lot78 in its balance sheets, and shows only limited resources:

• Zero revenues

• $38,000 net loss

• Zero cash, $1,000 “goodwill” assets

• $84,000 total liabilites

While the change in direction could bring better results, the time horizon for fundamental data would be longer than it takes for the stock to climb and drop. The next few days will show if LOTE has enough potential to keep up. The last email from March 4th suggests that another message could help to continue the trend, but we can never tell when investors have had enough. 

Also keep in mind that the acquisition of LOTE, a reverse buyout, was achieved with stock issues, so insiders hold a significant number of the company’s shares and could affect the price if they decide to sell. 

Among the last pumpers of LOTE is 007 Stock Chat, a promoter with a long history and an average compensation of $20,871. The pumper has already moved on to new picks, abandoning LOTE to move as investor sentiment would have it. The current pump lifted activity for 02 Secure Wireless, Inc. (OTC:OTOW), and caused disproportionate daily swings in price as investors flocked to buy the ticker that slumped to a valley of 11 cents.

In the case of actively promoted companies, keep in mind that the graph reflects mood much more than fundamentals and stay away, unless you are very aware of your time horizon and the affordable losses.