Valmie Resources Inc (OTCBB:VMRI) Crashes Hard
The pump for Valmie Resources Inc (OTCBB:VMRI) started a while ago and, at first, it did affect the stock positively. The run wasn’t exactly explosive, but at the beginning of the month, the volumes picked up and the ticker broke through the $3 per share barrier. It soon found itself playing with the $3.25 mark, but then, it all started to go a bit awry.
VMRI wobbled about for some time and last week, it started losing ground at a rapid rate. Three red sessions later, it was back below the $3 per share mark, and after a 16% drop yesterday, it found itself at $2.47. The crash continues in early trading today. About thirty minutes after the opening bell, VMRI is sitting at $1.89 (a whopping 24% in the red). All this despite the fact that yesterday, the company announced an agreement with a Mexico-based crop monitoring solutions provider which, the press release says, will help VMRI commercialize an agricultural drone platform.
The pumpers have not given up on the stock just yet and we are still receiving emails from a variety of promoters as we speak, but it would appear that their efforts are in vain. Why is that?
Falling for the hype around the unmanned aerial vehicle (UAV) industry is all well and good, but once you take a closer look at the company, you’ll see that things aren’t as bright as they should be.
For one, at yesterday’s close, VMRI‘s market cap sits at a little under $160 million and that might be a bit of a stretch for a company that just entered the sector. The company in question discloses in its latest 10-Q that it will need approximately $1.5 million in order to execute its business plan over the next two years, but it also says that at the moment, it doesn’t have this sort of money. Instead, it presents us with the following financial statement for the quarter ended February 28:
- cash: $5,277
- total assets: $31,127
- current liabilities: $75,130
- NO revenue since inception
- quarterly net loss: $128,509
The figures above could be enough to scare away the more risk-averse investors. The ones who like to do their extensive due diligence will be running for the hills because of another reason.
As we mentioned in our previous article, more than 59 million of the issued and outstanding VMRI shares were initially sold for less than $10 thousand. At the moment, they cost more than $100 million and the people holding them might be eager to take advantage of the humongous profit opportunity.
In addition to this, the Subsequent Events section of the latest report tells us that on April 6, when retail investors were paying between $2.76 and $3 for the stock, a further 3,839,270 shares saw the light of day at a rate of just $0.10 apiece. Those shares were issued as a conversion of debt.
