Konared Corp (OTCBB:KRED) Slips Despite Promising PR’s

Konared Corp (OTCBB:KRED) finished Friday’s trading with an 8% drop. When January’s final session ended, KRED was sitting at $0.90 – 33% below the 52-week high registered just three days before that. A disappointing performance and, at least at first glance, quite baffling.

While the ticker is sliding, the company seems to be making some progress. On January 27, they issued a status report on the retail locations where we can find KRED‘s products. From it, we learned that quite a lot of stores started selling their beverages over the last quarters and they told us that they expect to add many more over the coming months.

A day later, KRED made another announcement. And it was quite a big one. Apparently, they have closed a $1 million private placement which should, at least temporarily, solve some of the financial issues that we talked about in our previous articles. As we mentioned in January 29’s coverage, the details around the financing deal should be published in an 8-K form in the coming days. Whatever they are, the fresh cash injection should certainly help them stabilize their positions a bit and move on with their plans.

And on Friday, they showed us that they are trying to do just that. Apparently, they have signed a contract with Paddleboarding star and world champion, Jamie Mitchell who will endorse KRED‘s products by wearing KonaRed-branded gear during competitions. They also informed us in the same press release that they will be attending a trade show called Natural Products Expo West in March. All in all, KRED‘s novelty drinks should receive plenty of exposure which, you would agree, is needed considering the fact that the brand is relatively new.

Yet, investors’ reaction wasn’t really all that positive. Speaking of which, it still isn’t. About forty minutes after today’s opening bell, the ticker is a further 12% down. There is, of course, still time for a recovery, but the more the time goes by, the more unlikely it becomes. But what is the reason for the sudden drop?

It could only be the $2.3 million pump job that has been running for the better part of two weeks now. As we mentioned in our previous articles, touting is done through a combination of landing pages, videos, email alerts, and paper mailer brochures. The colossal budget normally suggests a prolonged effort and increased interest for weeks if not months on end. Despite this, KRED is showing signs of hesitation in the relatively early stages of the pump which could mean that the whole thing might be over sooner than expected.

This, by the way, might not be such a bad thing since it will allow the company to show us what their stock should really be worth. As we mentioned in our previous coverages, unlike the majority of small cap enterprises receiving the promotional treatment (Gray Fox Petroleum Corp (OTCBB:GFOX) and Centor Energy Inc (OTCBB:CNTO) are prime examples), KRED is actually a functioning, revenue-generating entity. They have a product that is already on the market and it seems to have a few favorable reviews.

That, however, is no guarantee for success. The SEC filings show a decrease in revenues year-over-year. They also reveal that some unnamed investors are currently holding a huge amount of discounted stock which makes the disproportionately inflated price all the more dangerous.

Make sure you do the necessary due diligence and weigh all the risks carefully before committing to an investment.