The latest promotional email that we received for Alkaline Water Company Inc (OTCBB:WTER
, WTER message board
) is dated October 14, it was sent by The Stock Junction
and it's titled "WTER - A High Growth Sector That Won't Ever Run Dry
". While the bottled water industry may never dry up, it would appear that the promotion has done just that. Or has it?
Well, trading volumes over the last couple of weeks have been negligible compared to the ones witnessed during the peak of the pump and the newsletters seem to have moved on to touting other small cap ventures like Endeavor IP Inc (OTCBB:ENIP) and Pan Global Corp (OTCMKTS:PGLO). WTER's share price has also crumbled and is currently sitting around 20% below October's values and a whopping 55% below the heights reached in September. All in all, it would appear that the pump really has come to its inevitable end.
Yet, when you check out iHub's discussion board dedicated to WTER, you'll see that it's quite active. Posts appear every few minutes and they are written by one and the same people. Not surprisingly, the users constantly posting their "opinions" fail to provide any new information and some of them admit that they have been compensated for flooding the boards with optimistic links to press releases and general information about the bottled water industry. This, on the one hand, means that a normal discussion becomes all but impossible, but on the other, it reveals that apparently, someone is still interested in touting WTER. Let's not forget as well, that the landing page set up especially for the promotion is still up an running and we won't be at all surprised if the pumpers still have some spare change left from the $3 million budget to print out a few more paper brochures.
It's clear that the first time their efforts resulted in nothing short of a disaster, but we're sure that some investors are wondering about the possibilities of WTER getting back to its former glory.
So far, things are not looking too good. The ticker did register a couple of green sessions on November 1 and on Monday, but the potential profits were all but negligible. Yesterday, it slid by about 7% and while about an hour after today's opening bell, it hovers in the green, it still seems somewhat reluctant to make a significant move.
Considering the amount of PR activity witnessed lately, this is somewhat odd. The company has issued no less than seven press releases over the last thirty days and they all speak about WTER's flagship product appearing on the shelves of all sorts of retails shops around the country, about new contracts and agreements and, most recently, about the addition of two new members to the sales team.
Another curious announcement was made yesterday when they said that they have completed a private placement worth $500 thousand. The money should be well-received since the new contracts mean increased demand and that, in turn, calls for more investments.
The thing is, the placement terms are not particularly favorable. WTER decided to issue preferred stock (convertible into around 1.1 million common shares at $0.43) as well as some warrants that are exercisable at $0.55. The preferred shares, if converted, are already in the money while the warrants might present a potential profit if the price grows. We reckon that keeping this in mind might not be a bad call.
In conclusion we can say that, as things stand today, a potential investment in WTER remains risky. The pumpers are showing some signs of waking up and the torrent of press releases might start to put too much pressure on the ticker at any time. The results of all the announced contracts and agreement should give investors a better view of the future but unfortunately, the only way of finding out what they are is to wait for the 10-Q's and 10-K's to come.