Will High Performance (OTCMKTS:TBEV) Stop Crashing?
On September 18 High Performance (OTCMKTS:TBEV) announced that they had officially initiated the sales launch of their High Performance Sports Drink. This means that the company now has a commercialized product and that revenues should start flowing in. You might have thought that such an important milestone would have caused the hype around the stock to reach unprecedented levels and that as a result TBEV would fly to new highs on the chart. In reality, however, the exact opposite happened.
On the day of the PR the ticker dropped by 8.70% while for the last two session the losses have become far more devastating – 19% wiped on Monday and a 17.6% crash from yesterday. Currently the stock is trading at $0.0014. TBEV experienced a similar crash at the start of the month but they managed to recover nearly all of the ground they lost. Will they do it once more?
If a new PR announcing a second production run or some numbers from the initial sales gets issued the stock could at least slow down its downfall. The red flags around TBEV will remain extremely serious though. The financial state of the company raises quite a lot of concerns. As of April 30 it had:
• $308,010 cash and total assets!!!
• $4.12 million total liabilities
• $283 thousand loss from operations
So far TBEV have been funding their operations primarily through convertible debt and it has definitely taken its toll. Out of the reported liabilities $2.18 million consisted of senior convertible notes that could be turned into common shares at a sizable discount to the market price.
Earlier this year the shareholders of the company suffered a rather painful blow when TBEV implemented a 1-for-10 reverse split and almost immediately after that began issuing astronomical amounts of shares. In just three months 2.25 billion shares were printed with nearly half of the amount being priced at $0.0005 per share. Don’t forget that the company also increased its authorized shares to 5 BILLION.
If the dilution is still ongoing and even more discounted shares are being unleashed on the open market the recent drop becomes far less surprising. The potential conversions of debt and the heightened volatility displayed by the stock must be taken into account before any trades are attempted.
