Lot 78, Inc. (OTCMKTS:LOTE), Where after Three Days of Selling?
Lot 78, Inc. (OTCMKTS:LOTE) has gone ghost on the promotional circuit, and the press releases stopped to pile on the front page on a well-visited news website. The company was sent above $23 on a mix of a paper mailer, promotional emails and PR hype, and how with three days of falling in a row, may finally make the big plunge that has been expected for weeks. 
True, LOTE managed to achieve one of its prophecies, to rise above $20 following the example of other fashion companies that became hits on the stock market. But LOTE is not the True Religion brand, its popularity and collections are much lower, so it seems like two months of stock market fame are enough.
The active emails for LOTE started at the end of March, and the latest message is from May 22nd. For that time, LOTE moved relentlessly from a dollar to more than $23 for a while, before retreating to $18 at the end of last week. With a new trading session looming, the question is if investors will join at a price that still looks too high.
LOTE shared its last financial results on May 24th, showing:
- $209,000 total quarterly revenues
- $264,000 net loss
- Zero cash
- $84,000 total liabilities
While not dismal, these results show that the fashion sales of Lot 78 are still somehow unsustainable. But this does not stop investors from choosing the hype and sending the total market cap of the company to an astonishing one billion dollars. This price does not seem sustainable, even with the promise and charm of young founder Ollie Amhurst, who really seems to care for the London-based brand.
Fundamentally, Lot 78 relies on online sales and several slots in big retail chains, selling a high-priced, so far limited collection. The company is also proud of its leather jackets, and suggested it may become famous by being linked with celebrities. So far, nothing like this has happened and LOTE was mostly moved by the lagging effect of the paper mailer landing on the doorsteps plus the electronic promotions.
While the LOTE run continued longer than some expected, this is not a proof of the ticker’s longevity. At $18, it will be much harder for LOTE to justify the positions and keep up with investors’ sentiment.
