Borislav Tonev

Vitamin Blue Inc (OTCBB:VTMB) Sink Deeper

by Borislav Tonev June 13, 2013
03VTMB.pngMinutes before the end of Monday's trading session Vitamin Blue Inc (OTCBB:VTMB, VTMB message board) announced that they are entering the marijuana business of all things. They say that they are going to do it through a new line of clothing that is produced from 100% organic products, namely, hemp. The press release itself is a little bit confusing and it states that because of their new business plan, they have formed partnerships with various suppliers (no names given) who could later become acquisition targets.

Nevertheless, their website now states that the new line of organic clothes will be ready by the start of the summer (which is pretty close) and by 6:30 PM on Tuesday they already had their first sales. According to the announcement, someone has already ordered more than $277 thousand worth of T-shirts made out of 100% organic material. That is business at lightning speed and of course, the third parties couldn't just stand there and watch the whole thing so they 4PHOT.pngpaid Damn Good Penny Picks and their affiliated newsletters $25 thousand to create some excitement around the ticker. But what did that do to the price?

While we can't be 100% certain, we reckon that VTMB's management team were hoping for performance similar to that of Growlife Inc (OTCBB:PHOT) (we wrote about them earlier today) when they announced the entrance into the medical pot business back in February. Unfortunately, it wasn't to be and in 4RAYS.pnga matter of two trading sessions VTMB wiped out 46% of its value, which is quite similar to what happened to Raystream Inc (OTCMKTS:RAYS) in the last couple of days. But why is that? We all know that marijuana is quite a hot topic in Pennyland and even mentioning the word in a press release is sometimes enough to skyrocket the price into the stratosphere.

And it would be a misstatement to say that traders weren't paying attention. The volume during yesterday's session reached 34 million shares which is more than thirty times the regular trading from the last three months. Yet the ticker plummeted and lost almost a third of its value in a single day.

The reasons for this could be a few. For one, the investors who went through VTMB's quarterly report were greeted by some pretty disappointing figures. Here's a quick summary of the most important ones:

  • cash: $1,254
  • current assets: $26 thousand
  • current liabilities: $731 thousand
  • revenue (Q1 of 2013): $27 thousand
  • net loss (Q1 of 2013): $200 thousand

What's even more disturbing, when you compare the results from the first quarter of 2013 and the last one of 2012, you will see that things are getting worse in terms of revenues and VTMB's explanation for this is lower demand, which is not what the shareholders want to hear. It's no wonder, then, that they're trying to expand their product line, but there are a few problems with that as well.

Apart from the fact that they're in a pretty poor financial state, the constant promotional pressure on the ticker and the never-ending disappointments that follow each and every campaign threaten to make investors lose all interest in VTMB. Active trading started in January and with it came the touting. After nearly 70 emails and several pumps, the ticker went from around $0.13 all the way down to $0.0064. That's a loss of nearly 95% in just six months making it more difficult than ever to trust VTMB and its management team.

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