Lot 78, Inc. (OTCMKTS:LOTED) Survives for Now, Drifts Sideways
The newly split Lot 78, Inc. (OTCMKTS:LOTED”>LOTED) is still trading cheerfully, having escaped the weight of a price near $20, plus the expectations that this jump in price is nothing but hot air, with a deep correction coming soon. The ticker slid down slightly to $4.44 on Friday, and volumes are weaker after the last promotional email on May 22nd. 
It seems there are not so many takers of the new shares, split as of the 5th of June. The recent financial results also reveal a little of the contribution of LOTE for the bottom line of the previous penny stock vehicle, Bold Energy, Inc. Post-split LOTED”>LOTED has:
- -Zero cash and cash equivalents
- $209,000 revenues
- $300,000 operating loss
- $84,000 total liabilities
The fashion house will have a lot of selling to do to justify its market capitalization of $944 million as of June 7th. Still, the ticker seems to be settled now, more probably moving sideways with minor corrections than crashing outright. Another promotion or press release may boost this selection, but for now the company itself and pumpers are remaining silent, careful not to overdo the hype.
The height for LOTE was above $23, but the price came with regular mentions of the company’s weaknesses. While the fashion house is based in London, the OTC company is housed with nine other firms in a small personal property, according to the business address. Also, while Lot 78 could stand on its own as a small, but vibrant business, the OTC exposure could bring the company to disproportionate attention.
A paper mailer campaign plus a series of emails kept LOTE at the top, and despite the doubts and jitters the ticker held on for more than two months, moving from a dollar to more than $20. Also, LOTE had concerns with naked short selling, in which speculators would borrow stock and sell it, hoping for a drop in price to be able to return the same number of shares. Also, some unauthorized buying was noticed on an unlicensed German stock market. Surprisingly, all this did not manage to reverse the trend while the campaign lasted and the paper mailer was still reaching doorsteps.
While the LOTE graph is somehow settled, the lack of promotional efforts are causing something of a slide, and in time this astonishing climb may be forgotten. If you hope for a recovery, it is best to stay away unless you can also afford a significant correction.
