The Multy-Million Pump For NuGene International Inc (OTCBB:NUGN) Continues
NuGene International Inc (OTCBB:NUGN) is definitely among the more stable pennystock ventures on the OTC Market. The company has a real office and not a virtual one, generates revenues through the sale of its products and has not resorted to relying on toxic debt in order to sustain its business. In fact, the financial results reported by NUGN for the first quarter of the year could be easily viewed as rather encouraging. According to the financial report the company finished the period with:
• $619 thousand cash
• $1.3 million total current assets
• $305 thousand total liabilities
• $481 thousand sales
• $240 thousand net loss
As the numbers show NUGN is still far from becoming a profitable entity but they have a respectable cash position and positive working capital. Just a couple of days ago the company even announced that an independent study confirmed the anti-aging efficacy of NuGene’s Universal Cream compared to untreated skin. Despite all of this though how realistic do you think it is that NUGN’s stock has not registered a single red session for the past two months?
Not only that but the ticker’s upward momentum has been picking up even more speed lately and after close to 3% added during yesterday’s trading the stock is now sitting at $3.61. When a company shows that it is moving in the right direction a positive reaction from the market is to be expected but unfortunately NUGN’s share price gains have also been facilitated through a multy-million paid pump.
Investors have been talking about a 28-page hard mailer brochure touting NUGN for the past couple of weeks. Although the fact that the stock’s movement has been influenced by the artificial hype of the promotion is enough of a red flag the disclaimer posted on page 27 of the mailer shows that the risks are even bigger. It states that the pump has a production budget of over $2.2 million provided by Result Corporaton, a third party shareholder of NUGN.
Usually when a stock becomes the target of paid pump it means that in the past millions of underpriced shares had been issued and NUGN is not an exception. Back in March 2014 a total of 148,200 shares were issued for $37,050. As a result of the two forward splits performed by NuGene the people who bought those shares now own more than 11 million shares which is a significant portion of the 39.5 million outstanding shares NUGN reported as of May 15. With each of the 11 million shares having a split-adjusted price of $0.0033 their owners could reap millions in profits at the current market price of the stock.
With each step up the chart NUGN is reaching more and more inflated prices. Even at the moment the company commands an overly-inflated market cap of $142 million. With the stock having appreciated so much it may be too risky to chase after it if you don’t already have an established position. Do your own due diligence and adjust your trades accordingly.
