Why ChromaDex Stock Blasted Almost 30% Higher Today Before Falling Into the Red

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What happened

Bioscience company ChromaDex (NASDAQ:CDXC) got off to a roaring start on Wednesday, rising nearly 29% in early trading, before melting to a 2.3% decline by midafternoon. A big distribution deal was the reason for the sudden pop.

So what

This morning, ChromaDex announced that its Tru Niagen dietary supplement will hit the shelves of Walmart (NYSE:WMT) beginning in June. Tru Niagen will be sold in two packaging options in the 3,000 stores where the product is being distributed. Remote shoppers can also purchase it through the Walmart e-commerce portal.

ChromaDex claims that Tru Niagen, which is approved by the Food and Drug Administration, increases nicotinamide adenine dinucleotide (NAD) in the body. This chemical helps the body produce energy, and it declines with age. It can also be eroded, says ChromaDex, by stressors such as overexercising, lack of sleep, and alcohol consumption. 

A researcher studying a sample in a petri dish.

Image source: Getty Images.

The product’s main ingredient, Niagen, is the substance that boosts NAD, according to ChromaDex. It is patented by the company.

ChromaDex has not offered any forecasts as to how the Walmart deal will affect its fundamentals.

Now what

That morning euphoria might have been tempered by the realization that ChromaDex is still very unprofitable; its net losses have ranged from $4.2 million to almost $8.9 million over the last four quarters, on revenue that reached as much as $15.3 million. The Walmart news is certainly encouraging, but it seems the healthcare company needs a bigger portfolio to become a more-compelling investment case.

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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