Nate’s Foods Co. (OTCMKTS:NHMD) Crashes by a Quarter

Last Friday the stock of Nate’s Foods Co. (OTCMKTS:NHMD) enjoyed yet another extremely positive session closing with a gain of 20% at $0.174 and even briefly spiking to $0.185. On Saturday the company held a launch party for its first product – Nate’s Pancakes batter while yesterday a limited amount of the product was available for purchase through the company’s official website.

The results were rather impressive and in a PR NHMD announced that they sold out all of the approximately 10 thousand available cans in just 20 minutes. The large amount of orders prompted the company to sell a second limited round of the product prior to the planned grocery store rollout which is scheduled for the first quarter of 2015.

No matter how encouraging yesterday’s news was it wasn’t enough to save NHMD’s stock from dropping to the bottom of the chart. The ticker plunged downwards almost from the opening bell and even though for a while it seemed that it might be able to recover it just didn’t happen. The stock wiped more than 25% of its value and closed at $0.13.

The massive drop could be attributed to investors deciding to take their profits at the currently inflated prices. Even now the stock is still sitting far above its previous price ranges and we should see if further corrections will take place.

Some of the red flags around the company are also rather serious. Although they recently announced a $3 million purchase order financing their financial state still causes concerns. At the end of August they had:

• $2083 cash and total assets
• $76 thousand total liabilities
• ZERO revenues
• $71 thousand net loss

In addition, millions of extremely cheap shares have been issued in the past – 42 million at $0.0008 and 6 million at $0.00025. At the current market price the people holding them stand to gain millions.

Next week the company will be meeting its master food broker and expects to begin finalizing its food broker agreements. They are also currently developing two new products – one-minute omelet and guacamole in a can, with a lot more products planned for next year. This means that interest towards the company as well as the stock’s volatility should remain heightened for now. Be sure to weigh all the risks before committing to any trades involving pennystocks.