NuGene International Inc (OTCBB:NUGN) Makes A Strong Recovery
On Friday NuGene International Inc (OTCBB:NUGN) reversed its direction and soared upwards by over 10%. When the market opened yesterday the positive momentum had gotten even stronger and by the end of the session the stock had managed to gain 38.55% for a close at $2.30. The performance is indeed impressive but NUGN will have to do much better if the company wants to return to its previous price ranges. In fact the gains from the last two sessions were almost what the company lost in a single day on August 13.
The current reversal was sparked by both the fact that NUGN had been crashing down the chart for quite a while and a bounce was certainly going to occur at some point and by the by the new PR published yesterday. Although the quarterly report was filed last Wednesday the company just now decided to comment on its results focusing entirely on the 153% increase in revenues year-over-year.
For a pennystock such an achievement is truly enormous and it is understandable why investors got excited. It is quite curious however that in the PR the company did not mention any of its other financial results, maybe because they were actually quite depressing. At the end of June, 2014, NUGN had a positive bottom line of $15,500 while now they reported a net loss of $772 thousand. Even quarter-over-quarter the rate at which the net loss increased surpassed the growth in revenues – at the end of March NUGN had $481 thousand revenues and $240 thousand net loss.
Not to mention that NuGene’s fundamentals remain completely disconnected from the market capitalization of the company that as a result of the past two sessions has now returned to over $91 million.
And if this wasn’t enough you should also add to the mix the $4.4 million hard mailer pump that targeted the stock of the company for months. The artificial hype created ample opportunities for the owners of the 11.1 million shares that they bought at a split-adjust price of $0.0033 to dump them on the open market for massive profits. And if these people still own even a portion of that amount they may continue to do so.
It is true that NUGN is a real company with real products and that it is generating respectable revenues, something the majority of the pennystock ventures can only dream about, but that doesn’t make the red flags any less serious. Take your time and do extensive due diligence before committing to any trades involving the stock.
