Fresh Healthy Vending International, Inc. (OTCBB:VEND) Wrecked as More Red Flags Revealed

Fresh Healthy Vending International, Inc. (OTCBB:VEND) is unraveling and there is little that can stop it in pre-holiday selling. The ticker shed another 28% to stand at $1.87, on dollar volumes a bit above $2 million. There were warnings already that VEND would be pressured by short-selling, and then late on Wednesday a critical article appeared, from SeekingAlpha, stating that VEND could easily slide down by 75%.

And the true pressure would not come from short sellers, but from seed and insider shareholders, who own enough underpriced shares to sell for great profits at the current prices. VEND boosted the number of shares last August, preparing for its move. Now, the company has 25 million shares outstanding, but investor Nicholas Yates holds more than 15 million shares, and a further 2 million were sold in a private placement- all at below-market prices.

Investors’ forums dialed down the optimism to cold disdain, as the last two days were seen as a temporary setback that would lead to a rebounce. Yet VEND was effectively slashed by half, a loss which at those prices would most probably not be remedied any time soon.

The paper mailer for VEND is sent away for a budget of $1.3 million, by Wall Street Revelators, and its title page holds a promise that VEND would be taking a chunk out of a $42 billion health food industry. It is extremely comical how VEND is in a downward spiral, yet the paper mailer suggests a price of nearly $23 is a possibility in the next 36 months.

VEND recalls the scenario of Lot 78, Inc. (OTCBB:LOTE), which managed to reach the impossible price range of $23 before a split and a retreat of 99%.

The recent pump for Endeavor IP, Inc. (OTCBB:ENIP) still holds a relatively respectable price, but looks like even at 77 cents, there is a deeper bottom to reach, once the fallout is in full swing.

So while VEND looks promising, and vending machines may be a ready source of earnings, the bulk of the attraction was created by the above mentioned promotional campaign. The downward pressure will have a long weekend of rest, but then Monday will reveal what happens next.

If you are still looking for an entry position to VEND, keep in mind that recoveries of large gaps are hard, and VEND may never again deliver the expectations.