Martinas B.

Vertical Branding pays Red Chip Visibility $36,000 for research coverage

by Martinas B. February 20, 2007
Lisa Springer from Red Chip Visibility has just issued a new report on Vertical Branding with a whopping $3.20 one year price target. Following the report Vertical Branding shares traded 100,900 shares and closed up over 30% on the day.

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Springer cites quarterly operating results illustrating the strength of the September 2006 quarter. While year over year their results show a nice improvement, sales are down over 25% from the December quarter. Apparently both Springer and the company are very optimistic about 2007. While the price target seems high, according to Springer it is based on 3x sales which is not an outrageous valuation.

We do not disagree with Springers reasoning for valuation, given the lack of Liquidity in this stock and violently volatile swings in quarterly operating results, we classify this investment as Extremely High Risk.

This disclaimer is from the press release:

RedChip Visibility Research Disclosure

VBDG paid RedChip Visibility $36,000 for the RedChip Visibility Research Program, which includes this report. RedChip Visibility, a division of RedChip Companies, Inc., and the Aurelius Consulting Group Inc., in a joint marketing agreement, have been contracted by Vertical Branding, Inc. to increase investor awareness of VBDG to the small-cap equity community. In the purview of Section 17(b) of the Securities Act of 1933 and in the interest of full disclosure, we call the reader's attention to the fact that the Aurelius Consulting Group is an investor relations firm hired by the Company and receives a monthly fee of $7,500 cash and $7,500 of shares of Rule 144 stock per month for investor relations services.

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