New Generation Consu (OTCMKTS:NGCG) With Another PR-Fueled Spike
New Generation Consu (OTCMKTS:NGCG) has been pretty active on the PR front recently. Last week, for example, the company issued not one, but two press releases, and they both sound pretty optimistic.
First, on Monday, NGCG published a shareholder update and talked about numerous things. They said that they have hired auditors and lawyers who will help them achieve fully reporting status, they announced that they will soon start selling their premium vodka in the US, and they said (once again) that they will unveil the packaging of their hemp-infused energy drinks before the end of the week. Sure enough, on Thursday, they showed everybody what the H420 Waters line of products will look like.
As you can see, plenty of good news, but for some reason, the stock is refusing to react in the way that you’d expect it to. On April 27, when the first press release came out, NGCG added about 5% and it reached $0.043 per share. Unfortunately, it then slipped and after three red sessions it was down by about 23%. On Friday, it bounced and it added 30%, reaching $0.043 again.
So, the stock performance is not exactly perfect. But is this just a temporary glitch? Or is it something you should really be worried about?
You’ll probably open the latest annual report, you’ll see the $913 thousand in revenues and the $153 thousand in net income, and you might reckon that all is well. After all, a revenue-generating, profitable company that has displayed its ability to stick to its deadlines is not something you see every day in Pennyland.
On the other hand, however, the more observant among you will probably notice that things might not be as bright as they seem. Take the longer term performance, for example. Five months ago, NGCG was hovering around the $0.25 per share mark and it was the definition of thinly traded. Some third parties apparently reckoned that they can change that with a paid pump, and they hired Stock Mister. The promotion did bring some volumes, but it also brought quite a lot of losses. Just two waves of alerts were enough to drag the stock from over $0.20 all the way to under a penny, and you can see that even the good news isn’t enough to help it fully recover.
There might be a perfectly good explanation for this. As we mentioned in our previous articles, NGCG has gone through quite a lot of dilution over the last few months. In October 2014, the company executed a 1 for 1,000 reverse split and as a result, the O/S count at the end of the year stood at less than 56 million. According to the company profile on the OTC Markets, however, it was hovering above 480 million on February 4. In other words, the stock was diluted by a massive 768% in a matter of just over a month.
The company wants to become fully reporting, but unfortunately, this will take some time, and until then, we won’t be able to say for sure how big the O/S count is. That is something you should probably bear in mind while making your investment decision.
About twenty-five minutes after today’s opening bell, NGCG is sliding again. It’s currently sitting at just over $0.04 per share (about 5% in the red).
