Dethrone Royal Holdings, Inc. (OTC:DRHC) Drops, Pumpers Promise a Bounce

Tuesday’s trading brought down Dethrone Royal Holdings, Inc (OTC:DRHC), producer of clothes for martial artists and currently lending its brand to a subsidiary to produce and market energy drinks. So far in January, the firm has been mentioned in 10 promotional emails with a total budget of $57,500. The upcoming idea of a new type of sports drink needs a closer look, since it may point to the future of the company.

The latest mailings from Tuesday show DRHC, which lost 22% on higher-volume selling, may bounce back in the next few days. DRHC was mentioned in several press releases in well-visited business news sites, and this coincided with the paid pumps in the past two days. However, Monster Trading Alerts made an attempt at excuses, stating that the company did not trade as expected.

Dethrone Holdings are a major force behind the popularity of mixed martial arts sports events and have a long history of quality. But only time will tell if the energy drink division is behaving well enough.

The DRHC trades relatively low, at 12 cents for a market cap of 11.6 million dollars and its Dethrone Beverage subdivision will rely on the following financial strengths and weaknesses to market its new product in February:

• $2,334 cash

• $212,900 current liabilities

• Zero revenues

• $142,225 net loss

The DRHC ticker is practically inactive before the spring of 2012, when the first licensing agreement was signed with Dethrone Holdings. Its team seems promising, having experience with the distribution of soft drinks and beers in the USA. The behavior of the stock, however, is more risky, especially with the exaggerated effect of paid promotions.

To its credit, the beverage company has secured the names of several well-known athletes to present and promote the product. DRHC has already formulated its drink which aims to combine the caffeine effect of energy drinks with the better hydration properties of sports drinks.

One of the more prominent pumpers for this ticker, Monster Trading Alerts, has a long past record of similar recommendations. One of its previous picks, Smack Sportswear, Inc. (OTC:SMAK) certainly did not bounce back after the deep losses. The ticker went down nearly 70% after the mailings stopped. DRHC may expect renewed interest as its product launches in a few weeks, but in general it is best not to rely too much on future promise and instead estimate how much losses you can absorb before buying the hype of paid promotional stock picks.