Many of today’s most active penny stocks’ volume is being fueled by vague and mysterious press releases that leave much to the imagination and offer little in the way of concrete information.
Deals are announced without companies being identified, or any terms with forecasts included. Despite the lack of information, many of these press releases still trigger high volume in an already volatile market.
Here are some examples:
Revolutionary Concepts Inc. (OTCQB: REVO), a security technology and monitoring company in the developmental stage saw its volume soar Feb. 19.
The Matthews, N.C.-based company had 34,763,092 shares change hands, which is significantly higher than its three-month average volume of 20,828,382 shares.
More PR with Little Specifics
The spike in Revolutionary Concept’s volume is a continuation of it record-setting volume the day before triggered by an announcement on Feb. 18, that the company had signed a multi-year global licensing agreement with a “company” for them to commercialize its patented "EyeTalk Communicator System."
Revolutionary Concepts said in the release that it forecasts $20 to $30 million in total estimated annual revenues from the residual and ongoing licensing fees and royalties that are projected to be generated from its new global license agreement from the marketing and exploitation of the patents. Of the $20 to $30 million in estimated annual revenues projected to be generated from the marketing and exploitation of the patents, REVO could receive an estimated 40% of the total, or $8 to $12 million annually.
Troubling Aspects
The most troubling aspect about this release is that the name of the company that has supposed to have signed this deal with Revolutionary Concepts is unnamed. Certainly if they are ready to project $20 to $30 million in potential revenue, it would be nice to know the name of the company that is going to help make this happen.
Burned Through More than $13 Million
The second big problem with Revolutionary Concepts is it abysmal financial track record. Since its founding on Mar. 12, 2004, the company has a $13.69 million accumulated net loss.
On Feb. 19, REVO’s share price closed at 2 cents, unchanged from its closing price of the previous day.
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Unnamed Potential PartnerHere’s another example:
BreedIT Corp.’s (OTCQB: BRDT) volume continued to soar Feb. 19 with more than 762,972 shares changing hands, more than twice its three-month average volume of 376,260 shares.
The robust volume appears to be tied to a Feb. 11 press release stating the once online gaming company turned agro-breeding solutions software maker for medical-marijuana growers is putting its focus on this sector.
In the vague and hard to decipher press release, New York-based BreedIT says it is under advanced negotiations with an unnamed company in Israel.
According to the release, this anonymous customer is “developing a new medical device for the medical Cannabis market. The medical device maker is considering a purchase of BreedIT's licensed technology to help determine which Cannabis varieties are better suited for use with its new medical device.”
No Real Specifics
While these days any release with the word marijuana in it is enough to fuel some activity, BreetIT’s release is disappointing at best. It offers no specifics other than an unnamed company and a general notion that the onetime online gaming company might license this company some new kind of software that will help it choose the best breed of medical marijuana.
Income Statement
However if you want some financial specifics about BreedIT, the best you will get is its last released income statement, which shows the company lost $349,000 as for the 12-month period ending Dec. 31, 2012.
On Feb 19, BRDT’s share price closed at 47 cents, down 2 cents from its closing price of 49 cents the previous day.
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Here’s an example of a company that’s volume was and continues to be affected by press releases that sometime reverse their positive announcements within days.
On Feb 19, Tranzbyte Corp. (OTCPINK: ERBB) Tranzbyte’s stock volume hit 245,384,824 shares. This is 1.6 times its three-month average of 130,168,281 shares.
A Major Backtrack
On Jan. 28, just three days after the Tempe, Ariz.-based company had told the world it had reached a verbal agreement with PARC, a licensed Arizona dispensary in Phoenix to use its dispensary machines, it announced that a final written agreement could not be achieved.
The second about-face announcement then tried unsuccessfully to put a positive spin on the major misstep by saying that Tranzbyte expects to announce its new choice of lead dispensary locations within the week.
"While it would have made some sense to have our premiere location close to the Tranzbyte main offices, we will treat this as an opportunity to place our machines within states that possess a more open regulatory environment," Tranzbyte president, David Gwyther said, in a terse written statement.
No Specifics
It appears that some industry experts, who were unimpressed by the Tranzbyte’s first announcement, were right to dismiss it as just more hype backed with very little substance.
That’s because buried deep within the first glib PR release, Tranzbyte’s President David Gwyther would not commit to a date when the first medical-medical marijuana vending machine would actually be up and running.
“We expect the arrival of our first machine within the next few weeks,” Gwyther said in a written statement. “Originally, our first automated dispensary was slated for delivery by the end of 2013. However, enhancements and refinements of the machine's capabilities in November and December caused Tranzbyte to roll back the arrival date about a month,” he added.
On Feb. 19 ERBB share price closed at 3 cents, unchanged from the share price at the close of the previous day.
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Tangible Products with Specifics
Here is an exception to the rule. This company’s releases offer concrete information about a tangible product rollout:
Australian vaporizer and e-cigarette maker mCig Inc.'s (OTCQB: MCIG) on Feb. 18 launched its new “Glass Pak" modular accessory for its mCig 2.0.
The Glass Pak comes in two formats:
Glass Pak (2) Piece - $5 MSRP - This package includes one (1) glass insert for dry herb, concentrates, oils, as well as one (1) glass screen which can be placed underneath the insert for additional insulation.
Glass Pak (4) Piece - $10 MSRP - This package includes three (3) glass inserts: A solid cylinder insert for concentrates, an oil insert with a single hole at the base, and the main dry herb insert. Lastly, the glass screen which can be placed underneath any other inserts for maximum activation.
This latest product rollout comes only a couple of weeks after mCig’s Feb. 3 unveiling of VitaCig, Inc., its new product made by its wholly-owned subsidiary.
Taking the same approach applied to the marijuana industry, mCig said it decided to avoid direct competition with the ultra-competitive and highly fragmented nicotine-based eCig industry. Instead, mCig decided to develop a niche product by embracing the potential of eCig technology (the ability to easily vaporize pre-packaged liquids from a pocket-sized device) as a medical delivery device.
In the fall of 2013 the company began quietly working on the new product codenamed: "Vita".
"We incorporated a new subsidiary: VitaCig, Inc. trademarked the name "VitaCig", and developed the "VitaCig" - a nicotine-free eCig that delivers a water-vapor comprised of vitamins, nutrients, and natural flavors," mCig's CEO Paul Rosenberg said, in a written statement.
As far as mCig is aware, a product comparable to VitaCig does not exist on the market. The company believes that VitaCig could cannibalize both the existing eCig market as well as the e-Hookah markets by providing a superior, enjoyable experience without the nicotine or overly sweet flavors. It believes the product will appeal to a wide market including: Smokers looking to quit, Smokers looking to reduce nicotine consumption, non-smokers, and rehabilitation patients suffering from illnesses.
"With the mCig we developed a brand that immediately disrupted the vaporizer market. With VitaCig we are hoping to disrupt the eCig market," Rosenberg said. "At this stage, it would be foolish to compete head on with the major tobacco companies who are embracing electronic cigarette technology and rolling out nicotine based products," he added.
On Feb 19, MCIG 's share price closed at 35 cents, unchanged from its closing price the previous day.
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Becoming Strong Vaporizer Player
mCig is also making an aggressive foray into the legal marijuana market by recently introducing an herb vaporizer that only retails for $10. On Jan. 10, the company announced that it expected to fulfill all incoming orders within 5-t-10 business days with order lead time declining to 3-to-5 business days by January 21, 2014.
"Today marks an important milestone for our company. In less than six months we have transitioned from a development stage company to launching two iterations of a device that is quickly cementing itself as the most efficient and affordable way to vaporize plant material," stated mCig, Inc. CEO Paul Rosenberg said, in a written statement.
Strategic Acquisition
On Jan. 24, mCig announced that it acquired Vapolution, Inc., an herbal vaporizer company based in Northern California in a non-dilutive transaction that consolidates an industry leader with over $1.3 million (unaudited aggregate revenue since 2010) in sales. The company contends that the acquisition transforms mCig, Inc. into a formidable competitor in two high growth categories: Personal Vaporizers (mCig 2.0, Vapolution PocketVape) and traditional home-use Vaporizers (Vapolution 2.0).
On Feb. 19, 2014 MCIG's share price closed at 35 cents, unchanged from its close the previous day.
Find out what could be the best investor's move when it comes to MCIGS by getting the complete report here, or by cutting and pasting the following link in your Web browser:
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