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PSA: I blew $80 on that 'proven' penny stock tip from a Reddit DD thread and watched it tank 60% in a week.
The guy swore the numbers on the balance sheet were solid, but I didn't realize the revenue spike was just a one-time government contract that already expired has anyone else lost cash trusting those detailed breakdowns without checking the dates?
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wright.leo1mo ago
Wait, they sold a warehouse just to make cash flow look good?
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hannahcraig1mo ago
Yeah the part where you said "I didn't realize the revenue spike was just a one-time government contract that already expired" really hits home. One thing nobody talks about is that those DD writeups almost always use the cash flow statement from the latest quarter, but they never mention if that cash came from selling off assets or taking out debt. I lost $200 on a stock that looked amazing on paper because the "operating cash flow" was actually just them selling a warehouse and a fleet of trucks to stay afloat. Another thing is those DDs always compare revenue year over year but skip the part where the company diluted shares to raise cash, so earnings per share actually went down even though total revenue went up. Always check the "shareholder equity" line too because if it's dropping fast that means the company is burning through money way faster than the revenue growth suggests.
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