LFVN closed Monday’s session at $0.847 with a 10% increase in the closing price and spiking volume of almost 756,000 shares. Traders were also puzzled by the sudden action and could only point out that the “ramping up of things in Australia is the reason for the recent price increase.” In one of it latest press releases, the company reported also the highest quarterly net revenue of approximately $7.5 million, along with record operating income of approximately $609,000 in the second fiscal quarter 2011.
Though, some time has already passed since that optimistic statement and LFVN stock has accumulated value on it by now. Another possible inspiration for the huge volume this week seem to be the alerts of a stock promoter, sent over the weekend and implying that LFVN stock will be in that promoter’s focus this week. That suggests that maybe the stock could gain even more, maybe aiming at the 52-week high of 90 cents per share.
Lifevantage manufactures and sells a patented dietary supplement that increases the body’s natural antioxidant protection. On paper, at the end of last year the company did not have enough cash to cover its accounts payable and the current portion of its debt, yet the management said that the cash available should be enough to cover the operations for at least a year.
On the other hand, the latest financial report shows also that if the company is unable to generate the expected cash from operations, it may be required to seek additional funds through debt, equity or equity-based financing, which even in available at favorable terms would dilute shareholders and have an adverse effect on the share price.
