We first wrote about Wild Craze Inc. (OTCBB:WILD) way back in February when they first started to be actively traded. Although they were just emerging on the market that didn’t stop them from being boosted by a promotional campaign that boasted a budget of $1.2 million. Despite having access to such a serious sum the price per share crashed hard dropping down from the heights of $0.93 to just $0.40 in a matter of weeks.
Since then the ticker has been left in a dormant state rarely registering any trades and mostly forgotten. Until last week when traders once again started showing interest in the stock. And, you guessed it, another pump began. This time around compensations aren’t as big but remain quite significant with Stock Castle and Wall Street Advisors expecting to receive $800 thousand. Bull In Advantage also chimed in with an email alert with the intention to sell the 14 thousand WILD shares they own.
With all the commotion going around it the stock gathered some momentum and enjoyed a steady climb culminating in a $0.40 close on Friday. Volume reached nearly 1.5 million traded shares, a record number for the company. Unfortunately the session wasn’t as optimistic as some traders would have hoped because all the pump efforts attracted the attention of George Sharp and he added WILD as an additional defendant in his ongoing civil lawsuit against email spam campaigns.
And surely enough, WILD displays some of the classical aspects of a pump – a radical change in business plan switching from multimedia and marketing right into the toy industry, a 13-for-1 forward stock split and a promotion to help in the creation of artificial hype. After the split seed shareholders had around 9 million shares bought for just $0.0038 and could make millions at the current prices.
One big plus for the company are the actual products they own. The toys are original and with an undeniable potential. But even though the company has managed to get the support of stars like NFL player Vernon Davis and singer/actress Christina Milian sales have been underwhelming. In the financial report for the period ending March 31 WILD disclosed the following results:
- $49 thousand cash
- $382 thousand total current assets
- $1.2 million total current liabilities
- $89 thousand sales
- $1.9 million net loss
We will get a more accurate picture of how well their products are received by the market when the report for the second quarter of 2013 gets filed this week. For now the company has secured a loan of up to $2 million so their operations aren’t facing any immediate problems. On August 2 an agreement with KVM Capital Partners was announced. According to its terms for the next 36 months KVM will have to purchase up to $2.8 million worth of common shares.
Investors should be careful when dealing with WILD. Doing your due diligence and keeping in mind the volatility of promoted stocks may help you avoid unnecessary losses. A perfect example are SourcingLink.net, Inc. (OTCMKTS:SNET) who lost a third of their value on Friday. The crash came on the very next day after the stock surged to $0.29 from its opening price of $0.042. CodeSmart Holdings (OTCBB:ITEN) also suffered a loss on Friday albeit on a much lesser scale. The company slid down by 11% to close at $2.35.