Investment in Obesity - eDiets.com

Obesity is a major problem throughout the nation yet companies have saw this as an opportunity to make money by providing diet program.  One of these diet program providers is eDiet.com (DIET), an internet based diet program provider.  


eDiet.com generates revenue by selling digital weight-loss programs, selling weight-loss meals, licensing its intellectual property and advertising from its contents.  Despite being in a growing business, the company hasn't been doing well for the past few year on declining revenue and growing net loss and as a result shares went from $8 per share in 2006 to the multi-year low of 28 cents per share recently on possibility of going out of business.  However today the company announced that it received a lifeline support with additional $1.5 million funding from outside investors.  Shares surged 22.79% so far to 49 cents per share with heavy volume of 1.32 shares traded.  The technical chart indicates bullish sign as the company is now above 20 day moving average with rising KD.  Another bright spot is the recent insider transaction as directors bought 2 million shares at 41 cents per share.  We should expect the stock to keep rising for the year.