Konared Corp (OTCBB:KRED) is Struggling
We last wrote about Konared Corp (OTCBB:KRED) more than a week ago and it’s fair to say that the stock has made some interesting movements since then. It had just registered a couple of negative sessions and was standing around $0.75 when our coverage went online. People were expecting it to bounce back up and bounce it did.
Several days of intense buying brought KRED back to $0.97 per share but, just as everyone was awaiting a break above the $1 mark, it faltered and dropped hard. On Tuesday it slipped by around 7% and yesterday, it slashed another 12.2% while racking up a dollar volume of around $1.88 million. Early trading today suggests that the drop might be even more painful. KRED opened the session at $0.7699 (around $0.02 below yesterday’s close) and slid down to $0.70 almost immediately. Half an hour in, it has managed to claw back some of the lost ground, but it’s still nearly 10% in the red.
If you are checking out KRED for the first time, you might be a bit surprised by investors’ negative attitude towards the ticker. After all, unlike many small cap enterprises that are traded on the OTC Markets, KonaRed actually have several products that you can find in numerous retail locations. What’s more, their beverages are derived from the coffee fruit which, the press releases say, has some impressive antioxidant properties – something very important in the health-conscious society of today.
The 8-K form containing the financial statement for the third quarter of 2013 does show that the revenues have experienced a rather scary drop year-over-year and they do have to work on improving the balance sheet, but the management team announced that their fresh public status is going to change all that.
And they seem to be right. A week ago, KRED issued a press release which informs us that the company has entered a $12 million purchase agreement with a Chicago-based investment group called Lincoln Park Capital. The SEC filing tells us that Lincoln will be buying shares of KonaRed stock whenever the company needs some cash for their operations, but there won’t be any ridiculous discounts which is definitely good news for the shareholders.
Before the financing deal, KRED announced a few other positive developments and, as we mentioned in some of our previous articles, they all sound good. So, why is the ticker struggling to stay afloat?
Because it’s being put under the pressure of a $2.3 million pump.
Unlike the majority of such campaigns, things look pretty quiet on the email front. In fact, the promotion has been running for almost a month now, but over the last four weeks, we have received only four alerts from the newsletters.
Most of the touting is done through the landing page that was set up for the pump, through a YouTube video (that has racked up more than 250 thousand views already), and through paper mailer brochures that are still flying around the snail mail.
The ticker already dropped below its pre-pump values and unless someone decides to renew the touting, it should soon be moving along under its own steam.
The problem is, without the artificial hype from the pumpers, KRED can be supported only through the company’s business operations. And, unfortunately, we won’t be able to see how they’re getting along until they publish their future reports. That’s why, KRED is still a risky choice and treading carefully is absolutely essential.
KRED wasn’t the only ticker to make an impact on the market during yesterday’s session. Primco Management Inc (OTCBB:PMCM) gained a whopping 142% while shifting around $4.6 million worth of shares. The run was triggered by a press release which informed investors that PMCM are entering the marijuana industry but it would appear that the hype is starting to die down a bit. About thirty minutes after today’s opening bell it is standing at $0.0013 which is roughly 20% below yesterday’s strong close.