Fortitude Group Inc (OTCMKTS:FRTD) Drops Despite Positive PR
Fortitude Group Inc (OTCMKTS:FRTD) entered the scorching hot marijuana industry in February and it’s fair to say that since then, their PR department has been working overtime.
Their efforts were particularly visible over the last couple of weeks. FRTD announced that their pre-paid solution for medical cannabis users is operational, said that the deal with Affinity Mediaworks Corp (OTCBB:AFFW) and PRIMARQ is all but completed and even started selling electronic vaporizers.
The press releases state that the share exchange agreement with AFFW will bring in at least $200 million in annual revenues while the VaporVites business should result in around $15 million in sales every year. If these figures turn into a reality, FRTD might become one of the most interesting companies on the OTC Markets.
And yet, for all the enthusiasm, the ticker is refusing to perform as expected. Over the last ten days, FRTD has registered only one green session and has wiped out around 67% of its market cap. So, what is the reason for the horrific drop?
The pessimism that engulfed the marijuana industry after Growlife Inc (OTCBB:PHOT)’s suspension can be attributable for some of the losses. Lots of pot stocks took some heavy blows after what was reported to be the most solid company in the industry got the axe.
Some investors around message boards reckon that short sellers have taken advantage of this fact which has, in turn, resulted in more losses for FRTD. This could be the case, but if you take a closer look, you’ll see that there are some other factors that might have contributed to the slide.
For one, FRTD‘s history is riddled with failures. This is the company’s eight name and umpteenth business plan. None of the previous efforts worked and they left the enterprise with just $2 thousand in current assets as of September 30, 2013.
Now, they are making some bold promises, but it would appear that not quite everything is going according to plan. The revolutionary MariMist medical cannabis product hasn’t been mentioned since February when they first announced it. The cash card payment solution had to be re-branded for reasons that are not very well explained and, as we mentioned in our previous articles, the VaporVites vaporizers are nowhere to be found outside FRTD‘s press releases. The deal with AFFW/PRIMARQ sounds optimistic enough, but it’s still not closed and it won’t bring in any immediate revenues.
As if that wasn’t enough, FRTD‘s older filings reveal that not that long ago, the company was headed by a person called Norman Birmingham who was also at the helm of Virtual Sourcing In (OTCMKTS:PGCX). He resigned from PGCX and, shortly after, its stock was targeted by a rather big promotional campaign. The results were, as you can see, quite devastating.
It’s clear that FRTD is extremely volatile at the moment. The company is surrounded by optimism coming out of press releases, investment groups, and no-compensation emails, but it would appear that this simply isn’t enough to push it on a more consistent run. That’s why, doing a lot of due diligence and weighing the risks carefully is absolutely essential.