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I love the free market.
  • TEXX Is Driving It's Shareholder's To Drink 0 comments
    Dec 2, 2012 8:23 PM | about stocks: TEXX

    You don't get accolades from Mike Morales at Tequila Aficianado unless you have a brand worth talking about. You shouldn't access public markets unless you plan to expand that brand people have been talking about. TEXX, what gives?

    Tequila Distinguido was launched in 2005, and in 2008 Emperial Americas acquired the rights to the brand. This past March, Emperial Americas announced a reverse merger into AAA Public Adjusting Group, and after a spike in price on some unfounded rumors, it's been all downhill ever since.

    Many OTC stocks offer investors ideas or concepts. Emperial Americas offered investors ownership in an existing company complete with an importer's license in hand, trademark and labels, and some high level marketing agreements in place. One would think a private placement would be achievable. After all, that's why private companies go public, right?

    After reaching a high of .82 earlier this year on light volume, TEXX is trading, if you call it that, around .02. The drastic price drop appears to be the result of a convertible note held by one of it's company directors. Victory Partner's, owned by COO Bruce Klein, provided funding for the reverse merger. In the 2nd quarter some serious debt conversion occurred, volume spiked, and that increase in volume continued into the 3rd quarter. Then it stopped, as did company communications.

    The company had released news about expanding it's distribution network as well increasing sales of the tequila through it's marketing efforts. Of course that appears to have given Victory Partners the leverage they needed to turn a $200K note into a 200% gain, by my estimates.

    It's a shame when a small company with such big potential either mishandles the public trust, or was mishandled by one of it's own. I assume the latter took place. The CEO appears to have far more invested with blood, sweat, and now tears, than it's convertible note holder.

    I need a drink, don't you?

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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