Red Giant Entertainment, Inc. (OTCMKTS:REDG) Drops Despite PR
Sometimes even a well-timed press release coming right at the open and communicating what should be good news is not enough to stop a stock from dropping. Yesterday morning Red Giant Entertainment, Inc. (OTCMKTS:REDG) came up with a new press announcement but unlike last time, the market didn’t react favorably and REDG proceeded to drop, ending the session 12% in the red.
The company announced that it will be a silver-level sponsor of the Diamond Retailer Summit. Company representatives will be at the event and have an opportunity to present and meet comic shop retailers. This is all well and good but it didn’t seem to illicit a particularly positive response from the market yesterday. It should be noted that in the spring of 2013 REDG came up with equally loud and proud press releases that didn’t culminate into much, if the company’s latest available report is anything to go by.
Even though in its spring report PR the company informed that sales were ‘progressing’ and comics were being received ‘well’ by customers, by definition here ‘well’ will have to mean ‘a lot better than the previous reported quarter’. Here is what REDG published in terms of financials in the quarter ended November 2013:
- $39 in cash
- $705 thousand in current liabilities
- $3 thousand in quarterly revenues
- $365 thousand in quarterly net loss
Hopeful investors on discussion boards are in full-on excitement mode, even though very little of material importance has happened that could warrant such excitement. Back in the spring of 2013 the company released many pieces of optimistic PR, including movie-making plans, plans for print runs in the millions, etc. Those culminated in the above figures.
We’re now also less than a week away from the first anniversary of the last email pumping REDG. The promotional campaign (which the company ‘strenuously disavowed’ months after the stock had crashed and burned) started on the last day of February, 2013. The initial pumper push was compensated $500 thousand and inflated share price dramatically, before REDG crashed from $0.20 to $0.01 in a matter of four weeks.
There are enough red flags surrounding REDG for investors to spend a bit of extra time doing their research and generally tread with care.
