American Heritage International Inc (OTCBB:AHII) Completely Burnt Out
The $1.36 million pump for American Heritage International Inc (OTCBB:AHII) is proving to be one of the most horrific campaigns of 2014. As you probably know, the promotion involves a landing page, some emails and some glossy brochures that flew around the snail mail for a while back in March.
Things didn’t seem too bad at first. The ticker was off to a surprisingly steady climb and on March 21, it hit its 52-week high of $1.62 per share. Just as everyone thought that nothing could stop it from going further up, however, it changed direction dramatically. In just three sessions, AHII incinerated more than 56% of its value.
The drop can be partly attributable to a Seeking Alpha article which came out on March 25. In it, a contributor who calls himself Penny Stock Realist expressed his opinions on AHII and said that according to him, the company doesn’t really deserves it market cap (which back then hovered above $150 million). The author disclosed a short position in the stock and there were quite a lot of people who accused him of intentionally pushing the price down so that he can cover his position at a profit. Whatever his motives, AHII did crash hard and fast pursuant to his coverage and we reckon that the people who got caught unprepared by the vicious selling should probably know by now that promoted penny stocks are extremely risky. Speaking of which, negative Seeking Alpha articles aren’t the only danger.
Currently, the volumes are nowhere near as big as they were a couple of weeks ago, but there is still some active trading which, in turn, should mean that there is still some people who are willing to trust the company and its clever electronic cigarettes.
And why wouldn’t they? The pumpers compare AHII to huge solid enterprises like Google Inc (NASDAQ:GOOG), Amazon.com, Inc. (NASDAQ:AMZN), Apple Inc. (NASDAQ:AAPL), and Microsoft Corporation (NASDAQ:MSFT) and try to convince you that somehow, these companies are comparable.
The thing is, GOOG, AMZN, AAPL, and MSFT published their 2013 results and when you compare them to the ones recorded by AHII, you’ll see that there’s a bit of a gap. Here’s a summary of the most important figures found in American Heritage’s 10-K:
- cash: $15 thousand
- current assets: $49 thousand
- current liabilities: $123 million
- yearly revenues: $15
- yearly net loss: $168 million
Indeed, Mr. Anthony Sarvucci (AHII‘s CEO) and the rest of the management team say that during the first quarter of 2014, they managed to increase their sales and that the future should be a lot brighter, but are their promises really worth $74 million (AHII‘s market cap at yesterday’s close)? We’ll leave it up to you to decide.
And while we’re on the subject of the management team, we might as well take a look at what’s happening to Pacific Oil Co. f/k/a Kat Racing, Inc. (OTCMKTS:POIL) – another penny stock headed by Mr. Sarvucci. As you can see from our articles, POIL too is the target of a promotional campaign and it too doesn’t seem to be performing spectacularly.