After smashing its way through yet another 52-week high, Rainbow Coral Corp (OTCMKTS:RBCC) closed Friday’s session with a price of $6.28 per share. That’s not bad. In fact, it’s pretty astonishing considering the sub-dollar levels RBCC occupied at the beginning of the month. But how did it reach last week’s lofty peak?
It was all because of the management team’s promises that they can distribute Naltrexone throughout the US and Canada. After months of silence, the company finally decided to update its shareholders on its future plans and with the help of a few noticeably uninformative announcements, it managed to push the stock in the right direction. Fluffy press releases, however, were never going to be enough to keep RBCC above the $6 per share mark.
Not least because the company’s latest 10-K looks like this:
- cash: $5 thousand
- current assets: $7 thousand
- current liabilities: $454 thousand
- yearly revenues: $128 thousand (coming from a fish store)
- yearly net loss: $990 thousand
Yesterday, the inevitable happened. In a matter of six and a half hours, RBCC wiped out more than 40% of its value and it finished the day at $3.65 per share. All in all, no surprises. But can the ticker ever revisit the prices it logged last week?
Naltrexone, it must be said, is a rather popular drug and, as the management team is only too happy to point out, there’s no shortage of people around the US and Canada who can make use of it. If RBCC somehow manage to start distributing it and if the new business endeavor turns out to be more profitable than the fish store they’re operating at the moment, the stock could see some growth.
Then again, even with the wind in its sales, RBCC might still have problems moving in the right direction. Those problems could arise from the 6.5 million shares that saw the light of day at a rate of $0.02 apiece on June 1. They also might come from the convertible notes that can be turned into stock at fixed prices ranging from $0.007 to $0.04 per share.
Considering all this, another terrifying drop similar to the one we saw yesterday, won’t be that shocking. What does seem to be a bit surprising is the way the regulatory organs have nothing to say about RBCC and its violent moves.
About ten minutes after today’s opening bell, the stock is sitting at $2.55 (another 30% in the red).