Vitamin Blue Inc (OTC:VTMB) Plunge in at the Deep End Once Again

They’re back! Yes, it all started in January when a series of promotions tried to tout Vitamin Blue Inc (OTC:VTMB). Then, February saw another round of pumps and the March edition is now underway. All that hyping had a horrific effect on the price of VTMB‘s shares but paid newsletters like PennyPlayoftheDay are not done with this ticker just yet.

We all know what happened to VTMB the last time they got pumped, and we thought that the promoters might have learned their lesson. It’s obvious that they haven’t but for a second we thought that VTMB might give us a glimmer of hope with a better-looking, up-to-date financial report. It wasn’t meant to be. The latest financial statement is still the one for the third quarter of 2012 and it still contains the same terrible figures:

• cash: $347
• current assets: $57 thousand
• current liabilities: $626 thousand
• revenue (Q3 of 2012): $38 thousand
• net loss (Q3 of 2012): $76 thousand

We’re used to receiving emails for companies that have horrible financial statements, but we really have a problem when the companies themselves try to jump in on the hype with overly optimistic press-releases in an attempt to paint a picture of a solid company when, in fact, they are struggling to pay the salaries.

This is the case with VTMB. Over the last couple of days news have been flying out of their HQ and it all sounds very good. Almost too good. They say that they have agreed to start a stock buyback program which will help them raise the price of the shares a bit and brighten the day for their tormented shareholders. We spotted a couple of fundamental problems with that.

For one, we can’t see how they are going to buy the shares back. We’re pretty sure that the $347 that they have in the bank won’t be enough and if they borrow money to realize their stock buyback program, that will probably have the opposite effect on the stockholders’ mood. The second thing that we’re not too sure about is the number of shares that VTMB will buy back – 5 million. That might sound like a lot, but in reality, it’s a drop in the ocean. To put things into perspective, the company CEO, who is also the controlling shareholder had a total of 510 million shares of common stock as at September 11, 2012. Here’s another thought for you to chew on – between September 7 and September 11, a total of 31 million shares were issued as compensation for services. With all that in mind, will the buyback be enough to make shareholders smile? We doubt it.

Another press release says that VTMB are now looking at making their products a bit more environmentally friendly which, let’s face it, is what everybody wants to do nowadays. The thing is, they say that they are entering a $7 billion market when, according to their financial statement, they have a total of $117 worth of property and equipment. We would say that the odds are against them.

We saw what happened to VTMB when they got pumped by PennyPlayoftheDay, but that’s not the only company that has crashed after their emails. Pioneer Exploration Inc (PINK:PIEX), for example got promoted at the start of February. As you can see from the chart on the right, the price has drawn a line that is quite similar to the one you see on VTMB‘s graph. You can even play Spot the difference.