Pulse Beverage Corp (OTCMKTS:PLSB) is a penny play that has grabbed hold of the attention of traders during the stock’s recent bounce up off its lows following a long and winding trek down a mountain of pain over recent years. The catalyst for the stock’s recent pop is unclear. However, we would point out that the company put out a press release a few weeks ago noting a surge in orders.
Specifically, the company announce that that due to the influx of capital Pulse has secured March orders in excess of 21,000 cases of Natural Cabana Lemonade/Limeade and Coconut Water; this is almost triple the sales booked for February. Shares responded by failing to go lower. That announcement came with the stock in a dead downtrend. That downtrend halted and we’ve seen a little bit of a base build in the interim. The, last week closed with a monster squeeze off the lows on all-time record volume. We cannot find any clear evidence of paid investor awareness campaigns driving the movement.
Pulse Beverage Corp (OTCMKTS:PLSB) trumpets itself as a company that develops, produces, markets and sells its Natural Cabana brand lemonade. The company has relationships with over 150 beverage distributors in all 50 states, Canada, Mexico and other countries.
In addition to Natural Cabana, the company sells coconut water and is developing a brand of heart healthy beverages.
According to company materials, “Pulse Beverage Corporation (“Pulse”) is an emerging beverage company that offers Natural Cabana® Lemonade/Limeade in 7 great tasting, low-calorie flavors and Natural Cabana® Coconut Water in pineapple and natural flavors. With Pulse’s revamped business model, utilizing warehouse direct and key accounts, Pulse directly teams up with major retailers like Walmart, Albertsons/Safeway, Kroger, Stater Bros, Food Max, Houchens, Kmart, 7-Eleven, United C-stores, Weis Markets, King Kullen, Dierbergs Markets, Hy-Vee Supermarket, WinCo Foods, Price Less Markets, Gristede’s Foods, Toot n Totem and Travel America. Consumers easily find Pulse’s prominently displayed products thereby increasing revenue and earnings for shareholders of Pulse.”
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As noted above, PLSB shares got on their horse last week after putting in strong support following the company’s early March press release detailing a surge in expected order flow for March.
As discussed in the company’s recent release, “As Pulse fulfills the orders booked for March they will ship more than 16,000 cases (February – 5,450 cases) of Natural Cabana® Cabana Lemonade/Limeade and more than 5,000 cases (February – 2,481 cases) of Natural Cabana® Coconut Water.”
Robert E. Yates, CEO of Pulse, said, “By restructuring our business, receiving new capital and putting it immediately to work producing product, we will ship enough product to reach a break-even EBITDA for the first time in the month of March.” Mr. Yates continued, “With additional capital we will be able to produce and ship even more product in April which would then be our first profitable month. We believe the best path to shareholder value is to continue to put together back to back periods of increased revenue and profit.”
According to communications out of the company, Pulse continues its negotiations with additional funding sources for additional capital, both debt and equity, and is in active talks to team up with a strategic partner to further increase product deliveries with less overhead expense.
Traders will note 82% upside in shares of the stock just over the past week. In addition, the stock has seen an influx in interest of late, with the stock’s recent average trading volume running above 1000% over what the stock has registered over the longer term.
At this time, carrying a capital value in the market of $0.7M, PLSB has virtually no cash on the books, which compares with about $1.6M in total current liabilities. One should also note that debt has been growing over recent quarters. PLSB is pulling in trailing 12-month revenues of $2.9M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -33.9%. This is suddenly an interesting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $PLSB stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!