Monarch America Inc (OTCMKTS:BTFL) Put Under the Promotional Pressure Again

Have you ever wondered what a paid pump can do to a penny stock? Wonder no more. Just take a look at Monarch America Inc (OTCMKTS:BTFL)’s performance over the last few months.

It all started when BTFL was still under its CANK ticker symbol. Investor Edge said that they expect to receive $300 thousand and in exchange, they unleashed what turned out to be a rather big pump. They sent out some emails, and if the people around the internet are to be believed, they also used telephone calls in an attempt to pump the stock. Later, Shawn Roberts from The Profit Letter also tried to give the ticker a boost with a landing page which, supposedly, costs $550 thousand.

At the same time, the company went through quite a lot of changes. The new name and the fresh ticker symbol were assigned in December of last year and a 3 for 1 forward split was also effectuated. Some good news hit the wire, but the stock simply refused to react to it.

Its price immediately after the split hovered around the $0.40 mark and it must be said that while the pumpers were around, it was just about holding up. In January, however, Investor Edge stopped sending in their emails and BTFL was left to bear the consequences. The drop that ensued saw the ticker fall all the way down to a 52-week low of just over $0.05 per share on February 23.

It managed to recover a small portion of the lost ground over the following weeks, but the volumes remained negligible. And that’s a bit strange because the company did show some progress. In January, BTFL acquired a retail store for growing equipment called The Big Tomato and thanks to this, they managed to present us with the following pro forma financial statement for the twelve months ended December 31, 2014:

  • cash: $45 thousand
  • current assets: $330 thousand
  • current liabilities: $1.8 million
  • yearly revenues: $3 million
  • yearly net loss: $543 thousand

Indeed, the balance sheet is somewhat underwhelming and there’s still a negative bottom line, but the 10-K did say that The Big Tomato is a profitable enterprise which means that the Q1 report (which is supposed to be out within the next two weeks) should look a bit better.

But is this why BTFL logged 10% in gains and a dollar volume of around $270 thousand on Friday?

Sadly, no. The reason for the sudden spike is another paid pump. Damn Good Penny Picks and the rest of the newsletters owned by Stellar Media Group LLC (who pocketed $17,500) are to blame this time. The latest wave of emails started flooding investors’ inboxes after Thursday’s closing bell and it’s quite clear that it did have its effect on the stock. Even the pumpers, however, label BTFL a “short term opportunity”, and, considering the terrible chart drawn by the ticker over the last six months or so, we can’t really blame them.

Of course, some of you will say that walking away from a stock simply because of its historical performance isn’t your best bet. Then again, putting your money on the line because an email told you to do so isn’t the best investment strategy, either.

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