Totally Green, Inc. (PINK:TLGN) stock appear to have found a serious resistance point at around 20 cents, as it is now rolling down after shortly hitting the $50 million dollar market cap.
The company is officially involved in a green business of manufacturing easily degradable water bottles and import of Orca compost machines, that are sold primarily to businesses dealing with the high costs of food waste hauling.
The products seem to be promising, but the company itself does not have the necessary transparency on their financials, thus making this a risky stock. The company does not file with the SEC and the business fundamentals are unknown since the acquisition of Totally Green, LLC took place in October.[BANNER]
The stock is mainly running up on news and expectations. The huge market capitalization is justified only abstractly, as no forecasts on the sales were provided and it is unclear what size the market is for both the degradable bottle and the compost bin, nor the share of that market that Totally Green can secure and sustain. Apart from the contract with The Department of the Interior, there were no other large deals announced for the quickly degrading bottles.
The Orca units clearly target businesses, not individual households. There were only 12 units sold in the US half a year ago, and any more recent data is unavailable. This shows that product recognition is yet to be worked on. The same source states there were just over 7000 units sold worldwide, which calculated to an average income of around $300 million under the uncertain period of time. Furthermore, the company only import the product, not manufactures it, thus the gross profit margin would be considerably low if the company has any sales in the first place.
