NuGene International Inc (OTCBB:NUGN) Proves the Skeptics Wrong
June 11 wasn’t a good day for NuGene International Inc (OTCBB:NUGN)’s shareholders. Back then, the company managed to wipe out nearly 40% of its market cap when the stock plummeted from more than $4.30 per share all the way to just over $2.60 in a matter of a single session. Having seen the massive crash, many people thought that NUGN will slowly but surely sink into oblivion, but it’s pretty clear from the performance over the last three weeks that this hasn’t happened.
In fact, the ticker has been recovering rather nicely. Red sessions have been virtually non-existent and the ticker is now sitting at a little under $3.88 per share. The volumes are strong and if the push continues, NUGN might soon reach its former glory. Considering some factors which we’ll touch upon in a minute, this seems quite remarkable. If you take just a quick look at the company, however, you won’t be that surprised by the stock’s impressive surge.
Things don’t look too bad on the PR front, for example. Several announcements have been made about the launch of new products, about the studies of upcoming ones, and about the appearance of NUGN‘s offerings on some major online shopping websites. This should all solidify the company’s financial situation which, the latest 10-Q shows, is not that bad as it is:
- cash: $619 thousand
- current assets: $1.3 million
- current liabilities: $305 thousand
- quarterly revenues: $481 thousand
- quarterly net loss: $240 thousand
So, businesswise, the company seems to be doing relatively well. The products are on sale, they carry the name of former model Kathy Ireland, and people seem to be writing positive reviews about them. Sounds like deciding whether you should invest in NUGN or not is not that difficult.
As is often the case, however, there’s a hitch. NUGN is where it is today not only because of the torrent of good news and the promising-looking 10-Q. It’s currently sitting at $3.88 per share because it’s being pumped quite extensively.
The first hard mailer brochures started flying around during the second half of May and apparently, they’ve been circulating around ever since. At first, the pump was estimated to cost around $2.3 million, but more recent copies of the brochure quote a budget of $4.4 million. The pumpers might be exaggerating with the money spent on the promotion, but regardless of this, the pump is definitely working. But for how long?
NUGN already showed us that it can crash with little or no warning, so treading carefully is definitely a good call. That’s especially true in light of the fact that the promotion has been going on for quite a while now and the people who stand to make money from it might be smiling their way to the bank already.
As we mentioned in our very first article on NUGN (which was published way before the actual promotion), in 2014, a lucky few had the chance to buy more than 11 million shares (as adjusted for the forward splits) for just over $37 thousand. They had, and could still have, a massive profit opportunity on their hands and if they decide to take it, NUGN will be left to its own devices. And nobody knows how it will behave once that happens.
