Yesterday, the promotions for DHRM stock have begun and the market’s reaction was immediate. Investors saw another large 18.77% jump of the share price and the first level of the promotional strategy has been completed. DHRM reached a price of $6.40 during the day and finally closed at $6.01 for a share.
According to the promoting company’s disclosure, that will lead to 5,000 shares being delivered to the promoters. The next price target is at $7.50 and as soon as it is hit, the promoters will receive the next 5,000 shares portion.
But this is not all of the costs that DHRM will bear for the rapid and at this point possibly short lived appreciation. The company has paid $26,000 for the preparation of an equity research report, a monthly fee of $8,000 and 10,000 restricted shares of common stock for regular investor awareness services. The additional two payments of 5,000 common shares each were, as already mentioned, a performance based compensation.
DHRM seems to have stable fundamentals, which suggest that the recent jumps have the chance not to remain only some short-sighted desire of the traders to make a quick profit. The company derives revenues from the sale of medical devices and homecare products in China. The increase in the sales and in the net income has been impressive over the last quarter ended this June, though that could not convince the market that DHRM can be a long-term gainer.
After the IPO of 1.5 million new shares of common stock at the end of April DHRM could not hold the price above $10 for a long time. From the nearly $10 million in net proceeds, $6.5 million are still on hand and the rest was so far spent on marketing and on product research and development. It seems that now the results will have to improve somewhat faster, so that stock promoting costs will no longer be part of DHRM’s marketing expenditures.
