That Marketing Solution Inc (OTCMKTS:TSTS) Bracing Itself for More Dilution

That Marketing Solution Inc (OTCMKTS:TSTS) has been one of the most horrific disasters we’ve seen lately. And we’re following penny stocks every day, so it’s fair to say that we’re no strangers to horrific disasters.

Here’s just how bad things have been. A couple of months ago, TSTS was hovering around $0.17 per share. On October 26, it closed at $0.017. Yesterday, it hit a 52-week low of just $0.0017 per share. That, for the statisticians among you means 99% of the value wiped out in a matter of just nine weeks.

So, who’s to blame?

Well, the pumpers certainly played their role. Back in the second half of October, they organized a pretty substantial campaign, but despite the $50 thousand spent on the pump and despite the promises of milk and honey, all the promoters managed to do was put their subscribers in a bit of a mood. They shouldn’t take all the credit, though.

Even without them, TSTS had some problems of its own. The latest 10-Q, for example, looks pretty terrible and the press releases we’ve read since the company changed its business plan back in September 2014 haven’t really yielded any tangible results.

This, in turn, means that the members of the management team have been faced with the task of raising capital which, as we all know, is not the easiest thing in the world when you’re at the helm of an OTC company. They found people who were willing to lend TSTS some money, and it must be said that although the notes were convertible, the fixed price of $0.30 per share did make some of the shareholders breathe a sigh of relief.

Sadly, TSTS‘ petrifying drop made the note holders feel a bit uneasy. Some negotiations were carried out, some amendments were agreed upon, and some maturity dates were extended. On October 20, however, the said maturity dates came and went and because TSTS didn’t pay off even a dime of its debt, all of it is now convertible at a 40%, 50%, or 60% discount to the market price, depending on the particular note.

We don’t know whether that has anything to do with it, but yesterday, TSTS issued another 8-K form and announced that the number of authorized shares is about to be raised from 500 million to 1.5 billion. As you might imagine, investors weren’t terribly excited about the news and in addition to pushing it to a new 52-week low, they dragged TSTS 40% down to a close of $0.0025 per share. They seem to be just as upset in early trading today. About fifteen minutes after the opening bell, TSTS is sitting at $0.002 (exactly 20% in the red).

As you can see, paid pumps and toxic notes often result in massive losses for penny stock investors. The only thing that could save you from the huge holes in your pockets is due diligence which is why we often tell you how important it is.