New Generation Consumer Group Inc. (OTCMKTS:NGCG) Falls In Spite Of PR
New Generation Consumer Group Inc. (OTCMKTS:NGCG) had another horrific 27.78% crash yesterday, despite issuing a reassuring PR before the beginning of the session.
Truth be told, it is somewhat surprising that NGCG‘s press release don’t seem to be as effective, in spite of the good news. “A new flavor addition to their [NGCG‘s] Hemp Infused product line up” may well bring additional revenues and increase the company’s overall profit as soon as the next quarter.
As we’ve mentioned on multiple occasions in the past, NGCG‘s balance sheets may be modest, but they certainly aren’t the worst out there:
- Cash and cash equivalents – $150 thousand
- Total Current Assets – $544 thousand
- Accounts payable – $5 thousand
- Note payable – $ 80 thousand
- Gross revenues – $471 thousand
- Net Income – $112 thousand
So if the company’s financial sheets and its business prospects aren’t to blame for the ticker’s fall, then what is?
As with so many other OTC Markets smallcaps companies, the blame here can probably be pinned on toxic dilution. A theory that is certainly plausible at this point is that note-holders saw the news and decided to try to make a little money, flooding the market with converted shares in the process. This seems likely, especially if you consider the NGCG‘s dilution track:
- On Oct. 2014 NGCG performed a 1 for 1,000 reverse split, which left it with just1.6 million shares outstanding
- On Dec. 31, 2014 NGCG‘s outstanding share count was 56 MILLION
- On Feb. 4, 2015 NGCG‘s outstanding share count was 484 MILLION
- On Mar. 31, 2015 NGCG‘s outstanding share count was 584 MILLION
Long story short – the news may be good, but as long as dilution rains down as hard as it has until now, NGCG investor value will suffer.
