Marani Brands, Inc. (OTCMKTS:MRIB) Slips Unexpectedly

From $0.0001 to more than $0.02 per share in just over four months. Even though penny stocks are generally quite volatile, such rallies are not an everyday occurrence and they are bound to attract a lot of attention. That’s why, Marani Brands, Inc. (OTCMKTS:MRIB) has been on the list of the most heavily traded OTC companies for quite a while now.

There have been a few reasons for the strong surge. After sitting in hibernation for the better part of two years, MRIB‘s management team decided to bring the stock back to life. A few press releases hit the wire and it was clear that it won’t take long for investors to start jumping in. Without a shadow of a doubt, the distribution agreement that was announced on November 22 had the strongest influence on the price movement. The contract spans five years and, according to Ms. Margrit Eyraud, the company CEO, should bring MRIB a total of $40 million in gross revenues.

There was some more news after that. On November 27 they announced that they will be sponsoring a famous boat racing team. On December 3, they said that their executive Vice President, Mr. Dan Senters, will take care of the domestic roll out of MRIB‘s vodka and on December 5 they announced something that affect shareholders and potential investors directly.

The press release from last Thursday informs us that the number of authorized shares will be reduced from 1 billion to 700 million and tells us that the management team “has no interest” in dilutive financing. Which is just as well since when you take a look at the outstanding share count in the press release and compare it to the number found in the Q3 report, you’ll see that in just over two months they have issued more than 44 million new common shares.

Another PR announcement hit the wire about half an hour after yesterday’s opening bell and, as you’d imagine, it is once again quite optimistic. Apparently, MRIB have received full trademark registration acceptance in the Dominican Republic and the management team said that they are expecting some similar approvals from different countries in the near future which means that the brand is growing globally. Good news, no doubt, but the stock performance failed to impress. In fact, it was quite dreadful.

Nearly 42 million shares changed hands bringing the dollar volume to more than $848 thousand, but the price slumped by around 23% and stopped at $0.018 per share.

The more optimistic traders around message boards (and there’s quite a lot of them) say that this is nothing more than a healthy consolidation and a preparation for a stronger surge in the right direction. That may be so, but the rather big trading volume is a huge cause for concern.

So is, by the way, the unusual activity around the ticker. There isn’t a traceable paid promotion, but we did receive some email alerts from Money Runners, the latest of which hit our inbox after Monday’s closing bell. As we noted, message boards and social media are buzzing with excitement which seems rather strange considering the fact that MRIB was all but dormant just a couple of months ago.

As the chart for Nutranomics, Inc. f/k/a Buka Ventures Inc (OTCBB:NNRX) shows, basing your investment decision on nothing more than the hype and the optimistic press releases could end disastrously wrong which is why we would advise you to do a lot of due diligence and consider the risks carefully before putting any money on the line.