Pulse Beverage Corp. (PINK:PLSB) Takes a Tumble Despite Hype
Yesterday Pulse Beverage Corp. (PINK:PLSB) seemed to have a second good day in a row before the stock was pressured into a close 10% down to $0.96. Several late January pumps assisted the stock on its way up, run primarily by promoters Hole In One Stocks.
After the paid pumps in question, another side factored into the PLSB equation. Goldman Small Cap Research ran coverage of the stock, issuing a research report that was also made available on the company’s Yahoo Finance page. Sadly, much like the pumps, the report in question constitutes little other than a paid advertisement for the company.
The report opens with what seems like a wildly unrealistic price target for the stock, set as high as $4.00 per share. After several pages it concludes with a disclaimer revealing Goldman Small Cap received $8 thousand in compensation for compiling the report. The disclaimer also states that all the information in the so-called ‘research’ report information provided by the company or by third parties. The release of the report early Tuesday morning before the open coincides nicely with the early session surge in price that brought PLSB to over a dollar per share.
Goldman Small Cap Research have a track history containing other reports on stocks that went on to crash spectacularly. In mid-August they issued a report on Liberty Gold Corp. (OTC:LBGO) – a company that was heavily promoted for thousands and thousands of dollars. The report set a price target of $3.00 when LBGO was trading around $0.75. Since then LBGO ran briefly, then started slipping and is currently sitting about 80% down from its September price and 95% below the price target set in the report.
The hype campaign for PLSB extends to NBT Equities Research as well. Their website’s pages profiling and providing news for PLSB contain a disclaimer stating that Pulse Beverage itself paid $20 thousand for year-long coverage. Again, the disclaimer states that it is essentially an advertisement and the statements made by the advertiser have not been verified as accurate.
PLSB is sitting on the following financials as per their latest quarterly report from September 2012:
- $235 thousand in cash
- $970 thousand in current liabilities
- $801 thousand in quarterly revenue
- $767 thousand in quarterly net loss
Revenues are a very decent figure, but on the other hand, the company has logged a net loss of over $2 million for the first three quarters of 2012. Turning its beverage business into a profitable venture may turn out to be an uphill battle for the company – not one necessarily lost but still difficult.
Traders are advised to be careful with this one as it’s both been very recently promoted and the advertisement campaign reaches beyond email pumps and into so-called ‘research’ reports and news postings that constitute paid advertisement.
