A stock promoter has sent today e-mail alerts to his subscribers, presenting the company as an established producer of generic medicine in Europe and as holding enormous potential due to its distribution licenses and competitive advantages. Unfortunately, it seems like it wasn’t love at first sight. For the paean of praise the promoter got a compensation of $75,000 in cash paid by a third party and the marketing campaign will run for five days starting today.
GENM stock looks like it could use some help in any case. The stock is highly illiquid and got the considerable volume of over 38,000 shares just in the last trading session on Friday. That volume did not move the price an inch upwards and the stock closed as usually at $0.37 for a share. Low liquidity and some bullish technical parameters could suggest that any additional demand could easily push GENM share price up without any concerns. However, even if GENM explodes today it is unlikely to stay up for long as the fundamentals of the company show that even the current stock price is by far too high.
Lastly the shares have been traded at an over 11,000 multiple to the company’s sales, the industry average being only about 8. Genmed’s business has negative tangible worth, and all the potential hiding in the “medical registration rights” valued at $5.6 million might take time and cost shareholder dilution until it gets realized.
Genmed’s latest 10-Q reveals meager revenues coming from consulting services, not from product sales, and the lower production and distribution costs stated as a competitive advantage in the promoter’s alert are also only positive projections. The management is still in the process of negotiating distribution agreements and sufficient cash to cover the short-term needs is also not available.
