Friday, July 06, 2012

Pulse Beverage (PLSB) Leaves Me Thristy

My ancient mail pile gets thinner by the day.  Here's another pump mailer from Tobin Smith's NBT Equities Research.  This one touted Pulse Beverage (PLSB), maker of flavored drinks.  The soft drink market is already crowded with vitamin-flavored water, sports drinks, trendy fruit juices, and such things.  I don't know how this brand can stand out unless a major label takes a dive.

What do the numbers tell us?  Net income has been negative since 2008.  The company only made $11K of gross revenue in 2011.  Their assets reported in the quarter ending March 31, 2012 are pretty dog-gone low for a company that aspires to serious penetration of the beverage market.  Come on, only $34K in total inventory after all this time in operation?  I will give the management team credit for serious experience in the beverage industry. 

Note #3 in their 10-K dated March 31, 2012 mentions the requirement for another $1.5M in capital to get their juices to market.  Check out their press releases since that date.  They appear to have plenty of distribution agreements in place, but they really need investors to step up with additional capital for that distribution network to be viable.

The stock debuted at a buck in 2011 and is worth about half that now.  Anyone who bought this stock when the touter mailer came out in the summer of 2011 has lost money.  I will never be able to explain why companies like this go public in the equity markets before they have proven themselves financially.  

Full disclosure:  No position in PLSB, ever.