Muscle Pharm Corporation. (OTC:MSLP) got an impressive spike yesterday. If one takes a look at how it stacks against the price movement over the year though, it doesn’t look all that great.
MSLP closed up 15.69% at $0.0118 on a huge volume of 22 million shares. The stock has had even more impressive performances in the past, but on the long run MSLP has been losing value.[BANNER]
There is a conflict in MSLP’s development which is not all that uncommon for growing companies. On one hand, MSLP has been reporting significant revenue growth, but since it hasn’t managed to actually turn a profit, its financing has come from debt and equity, and that on its turn translates into a lot of dilution.
So far, the negative dilutive effect seems to be stronger than the promise of further growth. MSLP recently increased the number of authorized shares which doesn’t help the situation.
Yesterday’s spike may be interpreted as a sign that things are about to turn around by some, but unless there is some significant information not available to the public, it may prove to be a one-day phenomenon.
If MSLP manages to keep up the growth and to optimize its expenses, it may turn out to be a sound investment. At this moment, however, there is still a lot of risk, especially keeping in mind that the dilution is going on full force.
