Feel Golf Co Inc. (PINK:FEEL) finished the last trading session with champagne and fireworks. The stock was set on fire by a newly issued promotional newsletter. This provoked many investors to ask themselves whether there is a real base for the stock to appreciate, or it is only a balloon inflated by third parties interested in a short-term surge-and-slump play?
The promotion of FEEL was initiated by Stocktwiter and Penny Stock Ace before the opening bell on Friday. The company was presented as an undervalued gem with a lot of future potential. However, due to the lack of complete disclosure, it is not clear how much did it cost to write this eulogy. The website of Stocktwiter indicates that it charges $30 thousand for a promotion in 2011.[BANNER]
The newsletter that was issued on Friday highlighted the fact that the company had 3 timers higher assets than liabilities. Unfortunately, the fact that almost 80% of the assets are low liquid and intangible was not revealed. In addition, between the last two reporting periods the number of outstanding shares has increased by nearly 50%. Therefore, fundamentals considerably undermine the slogans of the FEEL campaign.
Based on these facts, it can not be determined whether the statements about the bright future of FEEL are inspired by a sober analysis, or by some compensation for the service. Nevertheless, the promotion actually worked out well, because it managed to generate a record volume for FEEL and an increase in the stock price at the same time.
However, a promotion always acts like a double-edged sword. Usually, the short-term stock exaltation gets quickly suppressed by a stampede of sells, which devastates the stock value. Therefore, it could be a great challenge for FEEL to withstand the recoil of its promotion.
