NightCulture Inc (OTC:NGHT) are About to Disappoint Investors Once Again

After we received some emails about NightCulture Inc (OTC:NGHT) yesterday, we decided to check on them and see if Damn Good Penny Picks had other reasons apart from the $35,000 compensation, to create awareness around NGHT. We feared that although the emails sound as if we have a future world-wide concert promoter, who will soon start making billions, things don’t really stack up.

We suspected that the pump might have the opposite effect on the stock price and we turned out to be correct. Even the press-releases that have been flying out of NGHT‘s headquarters weren’t enough to keep them afloat and they ended yesterday’s session with a loss of 15%. During the day there were a couple of miniscule windows for profit, but they were so few and far in between, that most investors are probably pulling out quite a lot of hair right now.

So what caused the drop? For one, despite the bright promises in the emails, NGHT are hardly the best investment option out there. We discussed that as per their latest financial report, they have:

• cash: $5 thousand
• current assets: $20 thousand
• current liabilities: $1.4 million
• revenue: $483 thousand
• net loss: $149 thousand

accumulated deficit: $9 million

We also saw that they have been issuing quite a lot of notes that can be converted into shares of common stock in case NGHT are unable to pay them off. Having in mind the figures above, they’ll be hard-pressed to cover the debt with cash.

When you look into the company profile on the OTC Markets website, you will also see that their shares were suspended from trading by the SEC back in 2009. A further research reveals that the Commission wanted to make sure that they have disclosed their current liabilities properly. Trading was resumed, but shortly after the litigation, NGHT sold all their assets and changed their name as well as their ticker symbol. Indeed, that was quite a while ago, but it still pays to have it in mind when making your decisions.

You should also consider the fact that when NGHT are featured in a paid pump, things usually end up pear-shaped. They were promoted back in October 2012 when their trading price hovered around $0.25. Yesterday, they closed the session at $0.13 and, as of the time of writing, they are at $0.11.

We can’t imagine that the promoters are proud of this result, but you should not think for a moment that NGHT are the only ones who suffer badly after a paid pump. The same people who targeted NGHT yesterday also carried out a promotional effort on XTRA ENERGY CORP (PINK:XTPT) back on February 27. The chart on the right shows that their drop was even steeper than NGHT‘s. They lost 28% on the day after the pump and have been going further down since.

That’s why you should always make sure to carry out a thorough check on a company before trusting the emails sent out by paid promoters.