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Rich Cigars Inc (OTCMKTS:RCGR) Enjoys A Share Price Premium Backed By A Major Transition

Rich Cigars Inc (OTCMKTS:RCGR) Enjoys A Share Price Premium Backed By A Major Transition
Written by
Jim Bloom
Published on
December 19, 2017
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The past ten days have seen the share price of Rich Cigars Inc (OTCMKTS:RCGR) rise tenfold.The company whose stock price was trading at about $.03 on December 12 ended up closing at highs of over $1 just days later courtesy of an announcement by the management about their newly adopted strategy. Furthermore, the traded volumes rose to the millions over that same period as the market went on a frenzy trying to make the kill on that share price movement.Currently, however, their share price has fallen back to $0.3, a price movement which has raised questions on whether the prior price surge was indeed valuation driven or merely sentiment driven.This price movement is as seen below: RCGR Daily ChartWe took up the challenge and decided to do some research on the company’s fundamentals and strategy in a bid to assess the reason behind the above stated price surge. The results we obtained are as depicted later in this piece.Rich Cigars Inc: The Premium LookBefore going into the above, let us first have a brief look at the company.Founded in 2013, Rich Cigars Inc was established with the aim of ensuring the manufacture and distribution of high quality, hand rolled, premium cigars. The cigars were to be distributed under the Ric Cigars brand name and were sold via the internet and through retail locations.Currently, the company primarily operates in Ocala, Florida area. Their management intends to principally conduct business within the US in the foreseeable future.Rich Cigars Inc: The New LookA transition has been made by their management. This announcement was made during the week and has since been dubbed the reason behind the surge in the share price of RCGR. This, however, followed yet another announcement that was made six months earlier, one that shaped the path RCGR would follow going into the future.Back in June, RCGR made its first appearance on the OTC markets with the company finally obtaining its listing on the Pink Sheets markets. The debut which followed year-long meticulous planning and preparation and submission of documents ended with the company’s share price closing the day at $.95, up from their opening price of $.8, as it turned over 16,000 shares in traded volumes.During this period, their CEO Richard Davis concluded that their stock had performed much better than had been expected and was looking forward to a much more prosperous future for the company.The share price didn’t follow the course as was expected.Since then, their share price took a downturn as they hit lows of up to $0.02. The period between June and December also saw them remain quite silent with few press releases pertaining their operations. However, this all changed towards mid-December when their management made an announcement that would alter their course of operations.Rich Cigars Inc: The TransitionRich Cigars Inc announced on 14th December that they would be having a name change to 'Intercontinental Technology, Inc'. This was meant to be backed by the overall change in strategy going forward as the company’s new strategy will drive them into new territory while broadening their reach in the space they are currently engaged in.Their management through their CEO alluded to the fact that the company would be a holding company with different subsidiaries going forward and that their traditional business would be phased out. Furthermore, the subsidiaries would be unrelated to their traditional business.Moreover, the company was going to appoint a new management to oversee the transition in their strategy. This was especially important because of the twofold approach the company had taken in a bid to grow significantly over the coming periods.First, they will be embarking on an aggressive strategy to acquire, develop and market proprietary patented products both within the US and globally. This, however, was only an appetizer when compared to the next announcement.The company had decided to venture into the ever-growing cryptocurrency space by mining different currencies. The company which now has ownership of different cryptocurrency mining machines is working towards ensuring that they operate at full capacity in a bid to ensure they don’t miss a second of the record highs that have been derived from this new market.With this, their valuation went up by startling figures. However, if this policy is enforced and effectively so, the company may benefit significantly as their aggressive approach pays off for them quite soon.Rich Cigars Inc: FinancialsThe company made no revenues during the third quarter of 2017, 3Q2017 therefore ended up making a loss of $46,000. This was, however, an improvement from their previous operating loss of $154,000 in 2Q2017 that was derived from the high operating expenses of $131,000. Furthermore, their negative operating cash flow position stood at $5,000 down from $135,000 in the previous quarter. This showed both the cost-cutting approach taken up by the company as well as better cash flow management.However, caution is needed as they stand at a negative cash flow position of $689,000. This, if not managed properly, will have negative ramifications for the company going forward.ConclusionRCGR has done a lot in terms of financial strategic drift. However, the success of the above will be based on the successful implementation of this strategy by the company’s management. If properly done, the company is bound to benefit both from high gains as well as a high valuation as will be seen in their share price.We will be updating our subscribers as soon as we know more. For the latest updates on RCGR, sign up below!Disclosure: We have no position in RCGR and have not been compensated for this article.Image courtesy of Michael Ivanov via Flickr

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