For baseball fans out there, the triple play came today when the share price of Fuse Science Inc. (DROP) gave back the gains they had during All-Star week. DROP stock price plunged to 0.171, -16.59%, after $866,874 traded, 5,060,755 shares, within 24 hours of Jose Bautista and David Ortiz, two Fuse Science endorsers, both landing on the disabled list with an injured wrist and Achilles tendon respectively.
On July 2, 2012, the closing price for DROP stock was 0.31. According to the stats, fair value is at 0.22.
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DROP Stock Chart
Outstanding Shares: 127.77M
% Held by Insiders: 17.78%
20 Day Pct Change: -40.75%
20 Day Moving Avg: 0.2713
20 Day Avg Volume: 769,330
When we investigated the recently filed prospectus for Fuse Science filed the day before Independence Day, it was pretty basic math, the amounts converted to shares all worked out to be 0.22 per share, all 35,792,770. What we didn’t like was that, as compared to MusclePharm (MSLP) and their $1 million plus quarterly revenues, Fuse Science, although attractive with 10% of the share structure MusclePharm has, only recorded $24,174 last quarter.
Granted they are a new and fresh face to the bank, making deposits for the first time since they began in January 2009, an operating loss of $2,667,358 for the three months coupled with G&A expenses of $5,701,795 can mean only one thing: FUTURE STOCK DILUTION. Considering they had $1,064,541 in the bank as of March 31, 2012, they would need $1 million for every base Jose Baustista and David Ortiz steal this season and every hole-in-one that Tiger shoots in a Major tournament this year in order to make it through the year without diluting their stock further.
About DROP Stock
Fuse is a life sciences company which has developed and maintains the rights to sublingual and transdermal delivery systems for the efficient delivery to humans of energy, medicines, vitamins and minerals. The Company is in the initial launch phase of its sports nutrition and performance products, beginning with the commercial online launch on December 30, 2011 of EnerJel™, a transdermal product designed to address muscle fatigue and soreness, before, during and after physical activity. Simultaneously, the Company is focusing on commercializing additional products in the sports nutrition category as well as undertaking its OTC and pharmaceutical licensing efforts beginning with analgesic, hypoglycemic, and hyperglycemic platforms.
To view the SEC filings for DROP, click here.
Bottom Line: If asked to choose between two penny stocks, Fuse Science (DROP) and MusclePharm (MSLP), the winner is MSLP 9 times out of 10. DROP stock price will be a great Kareem Abdul-Jabar type rebound play for Wednesday, but long-term, it is conceivable to see the PPS headed towards 0.10 before 0.30.
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