WallStreetSurfers Have the Cure for Rainbow Coral Corp (OTC:RBCC)
If the news and the paid promoters are to be trusted, things are really heating up in Rainbow Coral Corp (OTC:RBCC)’s headquarters. Not more than a couple of weeks ago they were pumped by Quality Stocks. That didn’t really help boost the prices and so they are now featured in another promotion. This time the pumpers that have taken on RBCC are represented by WallStreetSurfers through their newsletter and a host of other people roaming and flooding the investors’ forums all over the Internet. Should you trust them, though?
Let’s start with the basics: RBCC are a biomedical company and, as such, they are developing a technology that sounds really exciting but, in fact, only people with abnormally large brains can understand. During the last couple of weeks, RBCC have been quite desperate to tell us that there are a lot of developments around their company. The headlines are plenty and they all sound so optimistic that they could make even the grumpiest of investors think about it.
It’s not all about the press-releases, though. The previous pump for RBCC started on February 10 and Quality Stocks’ disclaimer states that RBCC are going to pay them $50 thousand for the promotional effort, which we find extremely weird. Why? Well, just nine days after we received Quality Stocks’ email, RBCC decided to publish their latest 10-Q which covers the period before December 31, 2012. Looking through the report we find that the $50 thousand compensation exceeds their bank account balance by exactly $32,925. The rest of the figures don’t inspire any confidence, either:
- current assets: $46 thousand
- current liabilities: $133 thousand
- revenue: $24 thousand
- net loss: $182 thousand
This makes us wonder: “Shouldn’t they be more interested in getting the company back on its feet rather than spending money for paid pumps?”. Apparently they don’t think so. A few days after the first promotion, they issued a press-release in which they informed us that they have hired a new investor relations group that is supposed to help them maintain a closer connection with shareholders and potential investors. The thing that strikes us is that they don’t want to tell is which is the IR firm in question. Another thing that raised our eyebrows is the fact that the third party that paid WallStreetSurfers for today’s pump is an investor relations group called Mission IR. Whether this is a coincidence or not, we can’t be sure.
Of course, improving communication with investors and shareholders is a good idea, although, we’re struggling to see why, of all the ways to do it, they have gone for the paid pumpers. What disturbs us more, however, is the fact that the more urgent issues are not addressed.
The press-releases keep telling us about joint ventures and acquiring interests in companies that develop some magical serum that will treat cancer one day, but the financial report, as recent as it is, states absolutely nothing about contracts being signed, money being paid or any sort of partnerships being formed. At the same time, shares are being issued as compensation for all sorts of services. During the second half of 2012, for example nearly 3.5 million shares saw the light of day and the number of currently outstanding convertible notes is big enough to make shareholders tremble with fear.
All in all, apart from the overly optimistic emails and headlines, RBCC have very little to show in terms of actual operations. The way the last pump ended further increases the risk and puts additional question marks around their credibility.
