Creative Edge Nutrition Inc (OTCMKTS:FITX) Don’t Have The Right Moves
Back on May 1 Creative Edge Nutrition Inc (OTCMKTS:FITX) announced that they have appointed a new Vice President. His name is Leonard Armenta and his work experience sounds mightily impressive. He has years of experience in the nutritional supplements industry and according to the press release, he’s been the main driving force behind the success of some companies.
That one that is discuss the most is called Muscle Pharm Corporation. (OTCMKTS:MSLP), Mr. Armenta served as a Vice President there between 2008 and 2011 and, on the face of it at least, it does seem to be a serious company that has grown quite a lot over the years. MSLP‘s stock is currently traded at over $10 per share, and as the press release explains, they have tens of millions in revenue. At this point, a share price of such proportions is just a distant dream for FITX‘s shareholders, but with the new Vice President, we’re sure that some people thought that this might just become a reality. All in all, it was supposed to be a positive development and we were supposed to see FITX start to rise from the ground. But did we?
No, we didn’t. In fact, FITX have lost around 30% since then and the ticker is right now around the same position that it was before the medical marijuana fuss started around March 25. We wondered why?
Well, one thing is for sure – the vicious promotions from the last months have certainly played a role. When you look at FITX‘s chart for the last year or so, you will see that the line that the ticker draws resembles a roller coaster and when you check our database, you will find that the investors’ inboxes have been flooded with promotional emails from all sorts of newsletters.
It’s pretty clear that the ticker couldn’t possibly withstand the pressure of all the pumps and when you do a quick calculation you will see that since the first campaign began on September 11, 2012 FITX‘s shares have lost a whopping 83% of their value.
Recovery? Well it’s going to be really hard now. People have seen what happened in the past and right now, they will be rather reluctant to trust their money with a company that loses so much value in so little time which, by the way, is probably why the announcement of the new Vice President did nothing to the performance.
It’s not like FITX can convince people that the future is bright, as well. As we mentioned numerous times in our previous articles, while they did manage to market their products to a point where they can generate revenues amounting hundreds of thousands of dollars, they simply haven’t been able to produce the nutritional supplements at the right cost which means that the net loss for the fourth calendar quarter of 2012 amounts to $652 thousand.
And that brings us neatly to the story of Muscle Pharm Corporation – the previous venture of FITX‘s brand new Vice President. The press release from May 1 states that MSLP have generated tens of millions in revenue and, as we mentioned, this is true (the exact figure is $67 million). Scroll a bit further down in their financial statement, however, and you will see that things are not all that bright. The net loss recorded by MSLP for 2012 amounts to more than $18 million. In addition to this there is a working capital deficit of around $10 million as well as some legal issues regarding patent infringement.
On the whole, the similarities between MSLP and FITX are quite a lot – both companies have solid products and operations, both generate considerable revenue, both have incurred gigantic losses and when you check our database, you will find that, just like FITX, MSLP have also been targeted by paid pumps numerous times over the years. One thing is for sure, MSLP are not the successful company that the press release presents and they still have quite a journey in front of them. As for FITX, the road for them is even longer.
