Fresh Healthy Vending International Inc (OTCBB:VEND) Bounces Again

Last Wednesday, Fresh Healthy Vending International Inc (OTCBB:VEND) had a rather scary crash. Just six and a half hours of trading were enough for the ticker to wipe out around 14% of its market cap while shifting nearly 1.6 million shares. Many people thought that VEND is about to disappoint investors once again. They were in for a surprise.

The ticker managed to finish last week’s trading with two consecutive green sessions and yesterday it once again challenged the $3 per share mark, broke through it, and finished the day at $3.07. All this while shifting around $1.5 million worth of shares in just six and a half hours of trading.

An impressive recovery, no doubt, but considering the two press releases that came out of the company headquarters over the last seven days, it’s not really that shocking.

First, on January 16, they announced that they are going to take part in the Franchise Expo South event at the beginning of February. Certainly, the news is positive since, as we wrote in some of our previous articles, the latest 10-Q shows a 15% decrease in revenues year-over-year which suggests that VEND‘s products could do with a bit more exposure.

Yesterday came the second announcement and this one is even bigger. Apparently, VEND have secured some contacts with international organizations who will help them expand the brand and look for franchise partners outside the US.

We go through a fair few press releases every day and we should note that not many of them indicate quite so much potential growth. Are things really so simple though?

We’re not so sure. Bear in mind that as impressive as the announcements are, the buzz is huge and this might also have something to do with the fact that the pumpers are on VEND‘s tail yet again. As we mentioned in our previous articles, traders started reporting that some glossy brochures are flying around a couple of weeks ago.

This is the second paper mailer pump for VEND and the chart at the beginning of the article should give you an idea of how badly wrong the first one ended. What’s more, the new brochure’s fine print features a budget of $1.8 million which means that the current pump is even more expensive than the one carried out at the end of 2013.

But are the effects going to be even more devastating?

Well, the fact that someone has invested that much money into inflating the stock’s price means that there’s probably someone who can profit from the whole thing.

It is true that revenue generating entities like VEND rarely become the target of paid promotions and it is also true that, if press releases are to be believed, the operations seem to be going along nicely. Even so, we’ve already seen that this alone isn’t enough to protect the stock from rather horrific drops.

Speaking of which, Konared Corp (OTCBB:KRED) is another penny stock company with a real commercialized product that is going through the promotional treatment. The pump for KRED started recently and although it has so far resulted in no less than five consecutive green sessions, the momentum might start to wear off really soon.

That’s why, the stocks of both VEND and KRED remain extremely risky. Carefully considering all the dangers and doing a lot of due diligence is absolutely essential.