Definitive Rest Mattress, Co. (OTCMKTS:DRMC): Stock Price Nosedives as Promotion Stalls
As the cannabis stock booms seems to cool off, promotions are back, and they are showing their usual disastrous effect. The latest case is that of Definitive Rest Mattress, Co. (OTCMKTS:DRMC), which already burnt investors, but still has a long way to fall. After a critical article from Seeking Alpha, DRMC dropped by more than 61% to $0.1859, as selling expanded above $935,000. In a previous article, we warned that the climbing trend was looking shaky.
DRMC may continue downward, as the selling in the last couple of days did not offset the loading of shares during the most active days of the promotion. At the beginning of the week, optimism caused the buying of more than 9 million shares.
The Stock Psycho moved in on April 17th, though InvestorSoup.com received a larger compensation, $25,000 for the promotion. The sum total of the promotion is 64 emails and a distributed budget of $541,500. With those efforts, DRMC moved upward from 20 cents to a peak of $0.50, only to crash in a single day, as profit-takers moved in.
Investors’ opinions note that the pump has gone bad, and there was short-selling interest mixed in. So while there may be buying to cover positions, the new price does not quite look like a bargain. Not even when it becomes clear that DRMC has some revenues, and is not a totally empty ticker. In its report, not filed with the SEC, the company reveals:
- $6,129 cash
- $343,273 total current liabilities
- $896,754 annual revenues
- $228,573 gross profit
All of that will not protect DRMC anymore, as the promotion is too widespread, and the additional gains from the campaign are already gone. True, DRMC is not yet another fast-running marijuana stock, but the volatility and risks seem even higher.
If you are looking for a ticker still in active promotion, Premier Brands, Inc. (OTCMKTS:BRND) is currently in the spotlight, with a new email from Tuesday, from Pennybuster.com. BRND is running an even riskier game, as it is moving fast below the penny range. BRND shot upward on two consecutive days, from $0.0012 to $0.0033. In addition, the company announced an intention to link itself to the medical cannabis sector, hoping for a double effect.
We already mentioned how an otherwise promising company, Fresh Healthy Vending International, Inc. (OTCMKTS:VEND) was hurt by too many rounds of promotion. VEND saw email pumps along with paper mailers, and the company’s own corporate update PR. For now, VEND is hanging on at $3.47.
While DRMC clearly looks defunct, even at 19 cents it could spiral downward to nothing, as many OTC stocks have done. After the name change from Crescent Hill Capital Corp (until the end of last year), the mattress business seems to have lost its reputation one more time. Adjust the timing and the size of your investment, and don’t get caught investing too much in an artificially inflated ticker.