Prince Mexico SA Inc (OTCMKTS:LUVE) Going Up Again
Prince Mexico SA Inc (OTCMKTS:LUVE) managed to gain as much as 42% yesterday on volume amounting to 911 thousand shares and a trading value of around $179 thousand. All that in only three and a half hours of trading. We knew that something must be up.
Sure enough, as soon as we opened our database we saw that LUVE‘s been in the pumpers sights again. This time it’s Freesuperstocks.com and the lone email that they sent us is worth a not inconsiderable $15 thousand. This is nothing compared to the previous $350 thousand, 3-day campaign from June and we were quite sure that this is not the only thing that gave LUVE such a boost.
LUVE have finally managed to publish the quarterly report for the first three months of 2013 and this means that they no longer have the Limited Information Stamp on their OTC Markets page. We were quite eager to open the 10-Q and, knowing that Prince USA is a world renowned brand and having in mind that LUVE is the exclusive distributor for a country as big as Mexico, we were expecting some impressive figures. Here’s what we found instead:
- cash: $7 thousand
- current assets: $195 thousand
- current liabilities: $825 thousand
- quarterly revenue: $25 thousand
- quarterly net loss: $36 thousand
Everything happens for a reason, however, and the reason for the dismal financial results is the fact that Price USA, the manufacturer of the tennis equipment that LUVE sell, are going through some hard times, themselves. So hard in fact, that they filed for bankruptcy a couple of months ago. Apparently, they were bought out by a company called Authentic Brands Group LLC and they’re currently going through some restructuring.
How will that affect LUVE? Due to the bankruptcy filing they were unable to renegotiate the distribution agreement during the first quarter of 2013. They say in the report that they’re expecting some discussions around the contract to take place between March and June, but we have yet to see any sort of announcement about the continuation of the partnership.
When they saw that things are going sour with Prince, LUVE issued a press release where they said that they’re now looking at other brands to distribute throughout Mexico and they were apparently quite happy when they learned that Authentic Brand Group have taken the helm of Price since they said on June 17 that this could bring them closer to other sports equipment manufacturers.
Having in mind the rather dismal financial situation LUVE are displaying currently, we’re struggling to see how they will manage to draw the attention to other famous brands and although they seem very optimistic about it, they can provide neither guarantees, nor deadlines for any future development.
This means that things are quite uncertain around LUVE at the moment and some bad news in the coming days, weeks, or months will definitely affect the price which is already a bit shaky. A more immediate danger, however, is the promotional action. Freesuperstocks.com’s email from Tuesday did it’s job and the trading frenzy from yesterday proves it. Its effect however, will most likely be extremely short-lived. The aftermath of the last pump was absolutely catastrophic and some traders are still counting the losses.
If you think that the newsletter, Freesuperstocks.com, can somehow make a difference, you might want to look at their track record. In there we found Colorado Gold Mines Inc (OTCBB:CGLD) whose promotion took place at the beginning of March. As you can see from the chart on the right, it didn’t go exactly according to plan.
Another two tickers that managed to generate quite a lot of dollar volume during yesterday’s short session are Generex Biotechnology Corporation (OTCMKTS:GNBT) who jumped by about 12% and Implant Sciences Corporation (OTCMKTS:IMSC) who added around 4%. Their runs, however, were not fueled by paid promotions which is more than can be said about LUVE.
