by Ilana Greene and Ellen Feldman
Pure Bioscience (NASDAQ:PURE) doesn’t make sense. With high management salaries and low stock prices, this company breeds suspicion. In business since 1992, Pure’s raised significant capital and provided substantial salaries for its management. But it has yielded low revenue and high losses.
The company has raised $10's of millions to date, and its managers are well-paid. Pure's president and CEO, Michael Krall makes $400,000 per year salary and has received over $10 million in compensation in the past 12 yrs. That seems pretty absurd since he has racked up $49 million dollars in losses in the past 12 yrs.
Yet, Pure’s stock price has fallen $70 to under $1 in the past five years – a clear sign of poor management.It is shocking to see management is being rewarded for this kind of performance.
A common rule of thumb for investing is to follow the company’s management. If insiders are investing in their own company, it’s probably a good bet for you to invest. Yet, Pure Bio’s employees only own 3.23 percent of the company. where did all the money go that he pulled out of the company. It didn't go into buying stock in the company he runs.
Not only that, but also several lawsuits have been filed against the company. And Tom Hemingway, who has a seemingly vague management role, has a history of running companies into bankruptcy,making himself rich in the process, as well as a stack of lawsuits in his dossier. Is this the background of someone you hire to help your company?
With or without Hemingway, Pure is faltering. After reporting only $127,000 in revenue last quarter and losing $2.5 million, no one seems to be reading between the lines. The company is likely paying IR firms to unjustly promote its stock so management can unload more shares. Although they own very little stock I'm sure it is a matter of time before they enrich themselves with more free stock. The board of directors should be resign supporting this kind of self enrichment on the backs of shareholders losses.
Pure Bio is anything but pure; it really stinks to the high heavens. We will follow up with more on this shameless management.