Inside Bulls Aim for Strategic Global Inv (PINK:STBV)

We deal with so many promotional emails every day, that we can now discern the different approaches that the pumpers use to get their subscribers all fired up. Generally speaking, there are two routes – the first one is to promise investors that the company in question has great potential in terms of products and financing and the other is to use an array of complicated terms and technical factors that make people more confused than ever. Experience has taught us that, more often than not, none of these work but there is a third argument that promoters often use to back up their claims – the low float. This is exactly what Inside Bulls implemented in their email for Strategic Global Inv (PINK:STBV).

Indeed it is true that the lower the number of freely tradable shares, the easier it is for the price to move. Which way it will go, however, is anyone’s guess. Of course if Inside Bulls’ plan works out, the interest in STBV will be increased today and chances are that we might see some positive movement. But do STBV have what it takes to keep the prices up in the future to come?

Well, they have a subsidiary that builds and sells holiday villas in a famous surfing location in Mexico. You could say that this is a lucrative business in general, however, STBV have not yet managed to get it going. Still, they are not perturbed and they say that they have another potential source of revenue – a couple of websites.

Yes, it might not sound that exciting but, in reality, the ideas are not that bad. One of the portals allows you to browse through a variety of bars and pubs and even see live footage from them on your smartphone or PC. It might not sound all that intriguing at first, but if you’re wondering where you want to spend your Friday night, it could be rather useful. The other website is a sort of internet TV portal broadcasting, in STBV‘s words, a lot of interesting shows.

The latest press releases revolve mainly around these two treasure troves and we decided to open their annual report for the fiscal 2012 to see if things really are as good as they sound. Here’s a recap of the most important financials that we found in the statement:

• cash: $55 thousand
• current assets: $65 thousand
• current liabilities: $486 thousand
• yearly revenue: $73 thousand
• yearly net loss: $381 thousand

As you can see, while there is some revenue and while the figures look better than the ones from the year 2011, STBV still have a rather long way to go before we can classify them as a truly viable long-term investment.

The most important thing for them right now is to turn a profit, especially having in mind a recent press release that they published. In it, we read that they have obtained the right to sell 125 million shares of common stock during the next twelve months. On the one hand, this will bring them quite a lot of proceeds that they can use in their everyday operations. On the other, however, if they are not able to secure a steady flow of cash, their shareholders might get crushed by dilution.

All in all, STBV still remains a short-term play for experienced investors who can carefully weigh their chances before jumping in. That said, the risk is still there, as proven by the previous promotion that took place on STBV. It was back in February and as soon as the alerts stopped flooding the investors’ inboxes, the ticker took a plunge losing half of its value in just a couple of days.

Inside Bulls didn’t take part in this particular pump, but they can be blamed for a host of other promotional disasters. They tried to breathe some life into Southern Products Inc (OTC:SNPD) back on March 13 and while the increased volume suggests that a lot of people trusted the emails, it all came crashing down really soon. Sooner, in fact than a lot of investors expected.