LQR House (NASDAQ: LQR) stock should rise 6,000% today. This will not be of great comfort to shareholders as this will be a purely nominal LQR stock price rise - and therefore not making up for the 99.3% real price fall since listing back in August. This is not the very worst performance we’ve ever seen but it probably does deserve a place in that Pantheon and Hall of Fame. Because that is a just heinously bad stock price performance.
The business line: “LQR House Inc. provides digital marketing and brand development services for the alcoholic beverage business in the United States. Its primary business includes the development of limited batch spirit brands and marketing internal and external brands through an exclusive agreement with an e-commerce portal. The company serves individual consumers, wholesalers, and third-party alcohol brands. LQR House Inc. was incorporated in 2021 and is based in Miami Beach, Florida.”
The problem, obviously enough, is that it doesn’t do any of this very well. It appears to make $7,000 in gross profit to try to cover near $5 million a quarter in overheads. Which isn’t something that’s going to work. There’s also been a secondary issue to try to cover those losses. Issuing stock at 7 cents only months after an IPO at near $5 is just not one of those things anyone wants to see.
LQR House stock price from Google Finance
This then leads to a specific problem - the Nasdaq listing could be lost. It’s not that there’s anything objectively wrong with penny stocks, it’s just that when manipulation does take place it tends to be in penny stocks. Therefore the main markets do not allow long term penny stocks to remain upon them. The solution to this is simple enough - just declare that 60 old shares are now one new one - a one for 60 reverse stock split: “LQR House Inc. (LQR) will effect a one-for-sixty (1-60) reverse split of its Common Stock. The reverse stock split will become effective on Thursday, November 30, 2023.”
As this doesn’t change the market value of the company, just the number of shares in issue, this leads to a 6,000%, or 60x, change in the nominal stock price. Thus is penny stock status escaped. Or, perhaps, for the moment it is. For we see little to suggest that the decline is going to be halted. But who knows, management could surprise us all by actually creating a real business here.