Skinvisible Inc (PINK:SKVI) is Stock Guru’s Latest Promo-Crippled Stock
If you mislead yourselves into believing that Stock Guru’s pump job on Skinvisible Inc (PINK:SKVI) could really give the stock a huge boost yesterday, you might be regretting this decision already. As we have said many times before, paid promotions do more harm than good and this one made no exception.
Accordings to the bunch of emails touting SKVI that hit investors’ mailboxes yesterday, Stock Guru got a total of $6,200 for their effort with the option of receiving an additional $6,000 over the next six months. Surprisingly or not, however, the stock never managed to lift off the way it was expected to. Failing to gap up, SKVI opened trade at $0.035, peaked at $0.036, went as low as $0.029 before closing the session at $0.030 on a volume of more than 259 thousand. Thus, the stock provided a maximum profit opportunity of a mere 2.85% for the few lucky ones who bought at the open and managed to sell at the daily high, while emptying the pockets of pretty much everybody else.
Past experience shows that the pump was doomed to failure right from the outset. Why? For a start, penny stocks are particularly vulnerable to pump-induced manipulations when they are in a dire financial condition. This is exactly the case with Skinvisible. Here is a quick recap of its most recent 10-Q report covering the period ended Sep. 30, 2012:
- cash reserves: $67 thousand
- current assets: $103 thousand
- current liabilities: $1.8 million (resulting in a working capital deficit of $1.7 million)
- quarterly revenue: $23 thousand
- net loss for the period: $290 thousand
- net loss since inception in 1998: $22+ MILLION!
While SKVI has now spent more than 14 years pursuing success in developing novel transdermal delivery system technologies, the company’s mounting losses indicate that this business model might not be its cup of tea. In no way will SKVI‘s management team be able to attract external investors as long as the latter perceive the company as a financial blackhole, no matter how rosy a picture promoters will paint about the stock.
In addition, let us not remain blind to the fact that each and every promoter out there has its historical record of past pump efforts. When we let the numbers do the talking, we see that the vast majority of all the promotions which occurred in the past had more or less a disastrous effect on the market value of the corresponding stock in the mid or long term. The latter is yet another good reason to keep yourselves away from SKVI and any other promo-related penny stocks.
