NuGene Interantional Inc (OTCBB:NUGN) Barely Avoids Another Crash

For most of yesterday’s trading the stock of NuGene International Inc (OTCBB:NUGN) was fluctuating around the $1.5 mark. A little over an hour before the end of the session the ticker rallied and moved up. When the closing bell rang the stock was sitting at $1.61 for a loss of less than 1%. Still, so far NUGN have registered six consecutive sessions ending in the red.

It seems that investors are having a hard time getting excited about the company. The latest PR that was published on September 9 failed to create any lasting momentum behind the stock. At first this might seem rather strange – NUGN announced a memorandum of understanding with Bassett Salon Solution which could allow the company’s products to be distributed to the all of Bassett’s 7000 account locations by the first quarter of 2016. For now though Bassett will test NUGN‘s product line in only 2 salon accounts.

As a whole the current performance of the stock might leave some investors rather puzzled. After all, just three months ago, in mid-June, NUGN reached high of over $4.25 per share. What could have caused the stock to wipe over 62% of its value in such a short amount of time?

The answer is far from complicated – the only reason NUGN were able to surge to such price ranges in the first place was a $4.4 million paid pump that was carried through the distribution of hard mailer brochures. Even if the actual budget was lower than the disclosed sum the promotion was bound to get the attention of the market.

In our articles we warned to you about the serious dangers of playing the pumped stock. Especially when there were over 11.1 million free-trading shares that some people acquired at a split-adjusted price of $0.0033 per share. Thanks to the increased interest created by the paid promotion these people could have easily liquidated their holdings on the open market reaping millions in gains.

Without the pump NUGN‘s inflated market cap simply couldn’t be supported. Even though the stock has depreciated significantly the financials of the company still remain completely disconnected from the current market capitalization of more than $63 million.