Valmie Resources Inc (OTCBB:VMRI) Gaining Altitude Again
Valmie Resources Inc (OTCBB:VMRI) can easily take the crown of the most heavily promoted penny stock for the last month. The pump began on April 6 and since then we have received more than 100 email alerts from a myriad of promotional outfits.
Nearly $40 thousand has been splashed out since the beginning of May alone and we see the names of OTCEquity (and the rest of the Market365 LLC’s newsletters) and Elijah Brockman among the most active pumpers. Market365 LLC even went to the trouble of creating a landing page and we’ve noticed a few ads among various internet websites. So, the hype is plentiful, but how is the stock reacting to it?
When the pump began, VMRI was hovering precariously close to the $3 per share mark. It broke through it with ease and ran to a high of $3.20 on April 16. Unfortunately, it then stopped and tumbled all the way down to a bottom of $1.06 per share on April 28. As we mentioned already, this didn’t deter the pumpers and the paying parties and it looks like their persistence has paid off. Yesterday, VMRI logged its fourth consecutive green session and it finished the day with a price of $1.58 and a dollar volume of $343 thousand.
So, we’ve established that VMRI can move up when the artificial excitement is sufficient, but we’ve also learned that it has the tendency to crash badly and disappoint investors. Why is that?
The truth is, apart from the hype, there’s not much else that could draw you in. The management team tried to give the pumpers a hand by issuing a few press releases which would have you believe that VMRI really is trying to leave a significant mark on the unmanned aerial vehicles industry. On April 20, however, they also published the latest 10-Q which showed that at the end of February, the company had:
- cash: $5 thousand
- total assets: $31 thousand
- total liabilities: $350 thousand
- NO revenue since inception
- quarterly net loss: $135 thousand
All in all, a pretty typical scenario for a pumped penny stock – there’s lots of hype and the ticker seems to be reacting to it, but despite this, there’s little to convince you that putting your money on the line is a good call.
No pumped penny stock story is complete, however, without shares being given away for next to nothing. Sure enough, once you dig deeper into VMRI‘s filings, you’ll see that on April 6, when people like you were paying upwards of $2.80 per share on the open market, some note holders converted $383,927 worth of debt into 3,839,270 shares of common stock. The conversion rate, in case you haven’t calculated already, comes in at $0.10 per share which means that the profit opportunity for the note holders is absolutely massive.
It’s not nearly as massive, however, as the one for the people who bought more than 59 million shares (adjusted for the 60 for 1 forward split from December 2013) for less than $10 thousand a couple of years ago. This, by the way, is something we’ve been talking about since the very beginning of the pump.
About five minutes after today’s opening bell, VMRI is sitting at $1.63 per share (3% in the green).
