Sometimes the market throws opportunities at us that sound too good to be true. One stock that recently grabbed headlines is RGC, RegenCell—a relatively unknown company in the traditional medicine sector. On the surface, it looks like a company selling TCM products targeting two medical problems. But here’s where things get interesting.

Imagine this: if you had invested $1,566 just one month ago, your position today would have grown by 3,394%. Let’s break it down.

On 13th June 2025, the stock traded at $15.66 per share. Buying 100 shares would have cost $1,566. Three days later, the price shot up to $78. Shortly after, a 38-for-1 stock split occurred.

Now, if you’re not familiar with stock splits, think of it this way: every one share you owned became 38 shares. So your original 100 shares became 3,800 shares. With the current price at $14.40, your portfolio would now be $54,720. That’s a staggering 3,394% increase.

Sounds like a dream, right? But before we get too excited, let’s look under the hood.

As value investors, we always focus on fundamentals. The first place to check is the profit and loss statement, which shows whether a company is actually generating revenue and profit.

Here’s what we found for RegenCell:

• Revenue: $0 for both fiscal years ended June 2024 and 2023.
• Profit/Loss: Negative, as the company continues to incur expenses.

• Future Profitability: No clear signs that the company will generate meaningful revenue or become profitable.

• Intellectual Property: No patents, perhaps some trade secrets.

• Ownership: 81.2% of the company is owned by the CEO, Mr. Yat Gai Au.

In other words, despite the skyrocketing stock price, the company is still pre-revenue, loss-making, and largely controlled by a single individual. This raises a crucial question: who really benefits from these gains? In this case, it is predominantly the CEO, whose holdings now equate to billions in market value.

The situation is reminiscent of meme stocks like GameStop, where a low-priced stock experiences explosive growth due to hype rather than fundamentals—and eventually settles back.

This is a classic example of why value investors focus on buying good businesses with a wide economic moat and proven ability to sustain growth—even during tough times. A stock can skyrocket in price, but if the underlying business is unproven, pre-revenue, or highly concentrated in ownership, the risk is extremely high.

If you want to learn how to evaluate companies like a professional investor, join our upcoming webinar.

In this session, Cayden will cover:

• How to navigate market volatility in spite of changes in global trade and interest rates policies
• How an all-weather portfolio of stocks, bonds, and ETFs can help you stay calm and thrive no matter the market direction
• How Cash-Flow Options Strategies (CFOS), modelled after Warren Buffett's principles of Value Investing, support prudent long-term value investing
• Actionable & Duplicable Step-By-Step Value Investing Framework on identifying on identifying and evaluating high-quality companies.
  

Don’t get caught up in hype. Learn how to invest in companies with real fundamentals and grow your wealth the smart way.