Youngevity International Inc (fka YGYI)

[poloran]

$1.92 (Friday's closing price) minus $0.70 (pre-hand sanitizer price) * 30 million outstanding shares = $36.6 million of value created from hand sanitizer announcement.

Hand sanitizer = alcohol + aloe vera, very easy to make but currently in short supply. Once Purell and others in this business ramp up production, hard to see who buys from YGYI. At most, YGYI remains in this business for a year, probably less. This is a super low margin business. Even if it carries 15% EBITDA margins (real margin is lower), that implies $244 million ($36.6 million / 15%) in sales of hand sanitizer this year by YGYI. That's a lot of hand sanitizer! The company did less than $185 million in revenue last year. Not a stretch to say people are very bullish on this hand sanitizer announcement.

I doubt the company has capacity to sell $50 million of hand sanitizer to say nothing of the $244 million baked into the current price movement.

The hand sanitizer announcement was worth at best $0.25 per share, or a stock price of almost $1 per share ($0.70 + $0.25 = $0.95). This company, however, traded up to $2.70 per share on the announcement. How does a company with average daily trading volume of 90,000 shares trade 32 million shares in a single day? Short squeeze? Sure, that's part of it, but something else is going on here.

Any sensible investor will take their winnings off the table before this comes crashing down to $1 over the next few days.

Given how this stock has traded up in the last hour of trading over the past few days, I wouldn't be surprised if an SEC investigation is already underway. The SEC has been less indulgent of shady trading activity in these small cap cannabis/CBD companies. Last week, the SEC fired a shot across the bow of the cannabis/CBD industry with this this suit:

SEC Sues Cannabis Investor Doug Leighton for Allegedly Manipulating MassRoots Stock Price

LINK
https://flipboard.com/topic/cannabisindustry/sec-sues-cannabis-investor-doug-leighton-for-allegedly/a-uek2G_QjSyObz6QcJJEw7Q%3Aa%3A89958095-62d24b255e%2Fnewcannabisventures.com