Investors Return To DNA Brands, Inc. (OTCMKTS:DNAX)
In the world of pennystocks it is quite common for companies to issue confusing, misleading or insubstantial press releases. What is a rare sight though is outright lying but DNA Brands, Inc. (OTCMKTS:DNAX) did just that.
On June 9 they announced that their line of energy coffee products is going to be distributed by Trenton Coca-Cola Bottling Co. The PR stated that an agreement had been reached and even featured a quote from Trenton’s President – Mr. Chuck Jones. Seeing the words Coca and Cola, despite the fact that Trenton has nothing to do with The Coca-Cola Company (NYSE:KO), was still enough to drive investors into a buying frenzy. On the day of the announcement DNAX increased its share price by more than 525% on trade volume of 277 million shares.
On the very next day though it turned out that everything was a lie, or a “misunderstanding” as the official PR called the situation. Not only was the agreement not real but apparently Mr. Jones wasn’t the president of Trenton. Well, we reckon that things are a little bit more serious than a simple misunderstanding. Two whole sessions investors were making decisions based on completely false information.
Despite the fiasco it seems that traders were not ready to leave the company and when yesterday it announced a new distribution deal, we hope that this time it won’t be another misunderstanding, they decided to jump right back in. DNAX once again flew upwards and closed 43% higher at $0.0043.
Even if you disregard the whole situation DNAX is still surrounded by red flags. They are in a dire financial state and finished the first quarter of 2014 with:
- $110 thousand cash
- $428 thousand total current assets
- $3.2 million total current liabilities
- $48 thousand revenues
- $793 thousand net loss
An even bigger issue though is the continued dilution of the common stock. Just for the 11 days between May 18 and May 29 DNAX issued close to 70 million shares. This brought the outstanding shares to 318 million. With over $1.1 million worth of convertible notes and 1 billion authorized shares the dilution is unlikely to stop anytime soon.
DNAX is an extremely risky choice for investment. That is why any trades involving their stock should be preceded by doing your own due diligence in order to avoid any unnecessary losses.
After losing more than 10% in yesterday’s session the stock of Terra Tech Corp. (OTCMKTS:TRTC) is still falling in early trading today. Currently they are down by 5% at exactly 50 cents per share. Tranzbyte Corp. (OTCMKTS:ERBB) are making a tentative recovery sitting 2.3% in the green at $0.029 at the moment.