My daily reminder - I said this before, I’ll say it again - I’m impressed with the CEO’s story, and with what FDA approval could mean for CHUC, and I considered making a sizable investment in the stock, but then… I did my dd, which everyone on this board should do as well.
CHUC’s annual sales are $22MM, Net Income is NEGATIVE $2.1MM (even worse, last quarter the company lost $6.8MM). Granted, FDA approval should help the top - and bottom - lines. BUT, since two weeks ago, the company’s stock price and overall market cap have gotten completely ridiculous.
For most of the last twelve months, the company’s stock traded at 2 TENTHS of one penny (a market cap of $30-40MM)… which was reasonable… and gave investors at least some potential upside. The Company submitted its PMTA last September… and likely expects an FDA answer by next fall. But now, out of the blue, for no reason other than the fact that pumpers all over this board are talking about a $.50 price target (which is not supported by any analyst report that I can find… and which would equate to a $14 BILLION market cap!) the stock has risen to ridiculous levels.
At today’s price of just over one penny per share, CHUC is valued at $200Million (10 X SALES)! Come on guys. I like the story and the management team at CHUC. A lot. But I know and you know that today’s CHUC stock price makes ZERO sense. Even assuming (optimistically and hopefully) that FDA approval is granted (which is a BIG assumption), CHUC is worth less than $100MM… which means ½ penny ($0.005) is where the stock should be trading! I am NOT short CHUC. I am NOT a basher. I am simply a student of the market who hates to see so many investors duped into buying a stock that is overvalued by more than 100%.
