Hristina Beeva

Lot 78, Inc. (OTCMKTS:LOTED) Slashed by Half Again

by Hristina Beeva June 21, 2013
Lot 78, Inc. (OTCMKTS:LOTED) is just in time for the summer discounts of up to 80%. Investors are increasing selling volumes each day, shedding a stock no longer in fashion. While the London-based garment firm may have some success, it was clearly not enough to warrant the $23 pre-split price, and the past two weeks are unraveling the success story. LOTED0621.png

On Thursday, LOTED slid more than 42%, reaching 47 cents post-split price. Thus, the ticker is inches away from the pre-pump price, around a dollar. Where the fall will lead as many more investors try to shed their shares is unknown. WE have identified no known factor that could support the price at a certain level. At best, LOTED could turn into an underpriced, short-term bet. VPCO0621.png

There is no doubt that LOTED is a legitimate company, however, the business is too small to justify the effect of a $2.5 million paper mailer and emails reaching too many investors. The fashion house showed these financial results in the last quarter:

  • Zero cash and cash equivalents
  • $209,000 revenues
  • $300,000 operating loss
  • $84,000 total liabilities

None of these data managed to hold the inevitable drop in LOTED. At the peak, the stock was supported for a while by hope, but it took about a week after the final message from the company. After that, the drop was tentative, then precipitous.

There are still minor positive commentaries on message boards, again trying to point out that Lot 78 is indeed spreading its collections throughout physical space stores and online stores. But this will hardly stem the sell-off, and may cause only inveterate investors to join too late. Still, LOTED is not immune to a dead cat bounce somewhere in the near future.

Along with LOTED, we are tracking Vapor, Co. (OTCMKTS:VPCO), a seller of electronic cigarettes. The company spiked and deflated quickly in the past days, and now stopped its fall on valley buying. But VPCO is not burdened by the disproportionate effect of a promotion. Jammin Java, Corp. (OTCMKTS:JAMN) is another ticker reaching an awesome peak, with the weekend looming. The company is much more active in its business and the promotion, and is in danger of correcting for a while.

In the case of LOTED, it may be wiser to wait, as even a due diligence of the company will not answer the questions of where this stock could be taken. While it lasted, the run was hot enough to arouse suspicions of legality, but we gave our warnings long before the losses deepened to 80%.

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