Healthy Vending International, Inc. (OTCBB:VEND) Jumps on Effects of Paper Mailer

Healthy Vending International, Inc. (OTCBB:VEND) was being groomed for something big in the past months, and finally the efforts gave results. The company was active since September, when it started posting press releases. On Monday, VEND marked record buying volumes of 600K shares, adding more than 26% to its price to reach $2.94. Dollar volumes reached $1.35 million, as the glossy 24-page paper mailer started hitting more doorsteps. The party responsible for the promotions is Wall Street Revelator.

VEND is discovered as the legacy of former NASDAQ company, Green 4 Media Inc. That was this ticker’s name until September. The latest news from the company is on the growth of corporate operations for VEND, which precisely means adding $700,000 to the company’s network of healthy food vending machines.

Supposedly with a big distribution network, VEND offers the following financial information:

• $109 cash

• $109 total assets

• $4,828 total liabilities

• Zero revenues

• $26,238 net loss for 10 months to June 2013

It is really strange how a vending machine company, which should be a cash cow business, is without revenues and has a tiny amount of cash. None of the data supports a market cap of above $45 million, and such a robust stock price. Still, the website shows that VEND is indeed offering machines and locations, and there may be disparity between the company and the vehicle on the OTC markets. On the plus side, the company has just above 18 million outstanding shares, after an 1-for 11 split in August.

Also to the credit of VEND, the company may benefit in the longer term from the demand for healthier food and bans on soda machines. Still, a price above $6 in the next 6 to 12 months, and a price above $22 in the future is a stretch. While VEND can afford to expand and quickly mark revenues, the company still has to prove itself.

Yet in the coming weeks, as the paper mailer attracts new investors, VEND may be boosted disproportionately and follow the tracks of other promising companies under promotion, which in the end suffered negative consequences.

A much-promising alcohol company, Montalvo Spirits, Inc. (OTCBB:TQLA) was boosted by a combination of emails and a paper mailer. Yet despite the long-term promise of a decent distribution network and a cash-cow product, TQLA slid down to a faction of the promotional price. Wall Street Revelator joined in the hype for this ticker, through an Investors Hub email.

Another similar selection was Biozone Pharmaceuticals, Inc. (OTCBB:BZNE), which promised a wild run even without a promotion, but could not rile up enough investors’ enthusiasm and was left to trade choppily.

If you still want to ride the hype for VEND, keep in mind that paper mailers often have an effect of a few days, but reverse suddenly as the fresh stream of investors dries out, and short-selling pressure appears.