Tiger Woods is doing his part and won at the Chevron World Challenge, debuting his bag with the Fuse Science, Inc. (PINK:DROP) logo. The question which seems to bug some traders is, whether DROP will deliver on its part.
For the past three weeks, DROP has been trading around $0.45. Yesterday, DROP closed flat at $0.46, although it had opened at $0.50. The volume reached 2.7 million shares. There are a number of reasons for traders not to go crazy over DROP in a hurry.
One of them is that it’s now December, but there is still no sign of the 10-K. This is to be expected since annual reports sometimes take longer than quarterlies, but some hint at the financial situation at DROP would be appreciated by traders.[BANNER]
Another thing is that some traders probably remember what happened with some other big celebrity endorsements.
Comparing DROP’s situation with that of H & H Imports may not be appropriate, since Mr. Woods hasn’t touted the company stock as 50 Cent did with his Tweets earlier this year. Still, the 50 Cent story showed that having a celebrity isn’t enough if the company isn’t doing well on the business side.
Additionally, there has been talk of dilution, but it shouldn’t really be a surprise for anyone. The company didn’t hide the fact that it will need to increase it’s AS and OS. However, diluting the stock puts even more pressure on a successful business performance on DROP’s part. We will keep you apprised as the story unfolds.
