Muscle Pharm Corporation (OTC:MSLP, MSLP message board) strangely dropped by over 31% on Monday, following the company's rather too cheerful guidance for its 3rd quarter financial results.The plummeting of the share price complemented the downtrend, which has been slowly forming over the last week. The price was previously inflated by some promotional campaigns, though the promoters state they have not received any compensation for the efforts.
Furthermore, some unsolicited mail promotions were allegedly sent out just before the stock price turned down.
The financial results expectations actually look very promising compared to the same quarter in 2009:
• 500% top line growth
• Debt reduced by 48%
• Gross profit margin turned positive at 34%
Net profitability is yet to be achieved, but if these results are not miscalculated, it should set a significantly higher share price. The stock should not be jumped on right away though, as the obvious contradiction between news and market reaction points out that something is wrong.
The promotions and a possible manipulation by the market makers are the most likely reasons for the current price plummeting. Advertisements are getting the traders cautious, and the clearly adverse effect of the positive news point to possible stock price manipulations.
The company didn't report any changes in their cash position, and previous results pointed that they were running low on liquid assets.
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