On March 20, at approximately 10:00 am PST, Larry “Buzzy” Twombly, the CEO and President of V GROUP, Inc. presented about a thirty-minute conference call for shareholders. By around 1:00 pm PST the stock lost about half its value by the close. Was this drop in stock price warranted? Why did this happen? Lets examine the contents of the conference call in detail and look at certain OTC market dynamics and mindsets and the answer will become crystal clear.
FIRST A BIT OF HISTORY: Larry “Buzzy” Twombly has been an innovator in the beverage industry since 1995 successfully developing and launching Buzzy’s Coffee. Mr. Twombly grew Buzzy’s Coffee into a $2M a year brand at which point he sold the brand to a venture capital group. Later he went on to advise and assist in the development and launch of some of the most successful brands in the industry such as Vitamin Water, Fuze, SoBe, No Fear Energy, and many others. Mr. Twombly, along with his team has developed relationships with some of the most influential distributors in the country that reach spans from East Coast to West Coast. “The beverage industry isn’t just what I do, it’s who I am”. – Larry Twombly
First of all, lets define what the V GROUP, Inc. is. As per their latest filings: V Group, Inc. is a for-profit stock corporation registered in the State of Oklahoma with its headquarters located in San Diego, California. V Group, Inc. is primarily a manufacturer of consumer beverage products, dedicated to developing creating, marketing, and manufacturing the very best in innovative beverage products aimed at a constantly evolving consumer. THE V GROUP MISSION: V Group, Inc. also intends to assist in the incubation and development of other business opportunities related and unrelated to the beverage industry to maximize value and opportunity for shareholders.(Source: https://www.otcmarkets.com/financialReportViewer?symbol=VGID&id=167721)
Now, lets dive right into the substance of the conference call. Larry opened the conference call by discussing the Fernhill Beverage spinoff that he set out to do for VGID shareholders for their support and he also thought it was the right thing to do. He discussed the long arduous battle he had with Finra and SEC. He discussed all the lawyer fees he absorbed and prolonged time it took, but at the end of the day he was able to get them to approve the deal. The payment date was 1/27/2017 and each eligible shareholder for VGID received a 10:1 ratio, meaning for every 10 shares of VGID the shareholder received 1 share of Fernhill Beverage FHBC. He concluded this topic by saying that the beverage line under Fernhill is doing well and sales are growing with distribution. Fernhill Beverages currently trades on the OTC for about .015. (Source: http://ih.advfn.com/p.php?pid=nmona&article=73759336)
Next, Larry announced the new A.N.D. CBD (Cannabis Beverage Drink). He said they already have distribution deals in place and that they completed the design, graphics, packaging, etc. He also stated that they are all set to roll out the CBD line in June as stated in the press release a few days ago. (Source: http://ih.advfn.com/p.php?pid=nmona&article=74078201)
He also discussed an issue that was recently resolved in distribution channels. Larry said that one of their major distributors was bought out and that there was a period of product line reviews by the new owners. The good news is they decided to continue to distribute A.N.D. brand and that sales are back on track as they were prior to the issue.
Next, Larry was very excited to announce a new Vitamin Water line with anti-oxidant ingredients and vitamins that will be it will be rolled out also around mid-year (June 2017) called “Pump Fitness.” All the packaging, design, graphics and distribution deals are in place as well and will feature a unique dumbbell weight design. Larry stated from his research, it’s going to be a great product for workout or fitness enthusiasts both male and female alike.
Next the CEO discussed the next spinoff that is well in the works for V GROUP, Inc. and its shareholders. Larry stated that they are presently setting the stage to incubate/spinoff as an IPO “Hollywood Hair Cutters.” There are currently 3 retail brick and mortar locations being negotiated and they are preparing the necessary paperwork as well to Finra. Larry said that these spinoffs will be fully reporting and audited companies on a higher OTC tier. The stores should begin to open up in the next 3 months. Larry explained that VGID shareholders as of recorded set date will receive set shares in the NEW IPO- Hollywood Hair Cutters.
Larry confidently reiterated that the path for spinoffs/IPO’s has been established and doesn’t anticipate delays like he experienced in the Fernhill Beverage deal (FHBC). One interesting note here is that Larry’s sister, Linda Chadwick, is the CEO for Fantastic Sams, which is one of the most successful hair/beauty salon franchises with over 1,200 locations in United States and Canada. Larry did say that she would not be involved in the company at first, but he did say that she might become involved sometime in the future if, and when, she either resigns from her current position, or retires. Regardless, having a relative in this sector with the amount of experience, knowledge, contacts, etc would priceless guidance around only a phone call away.
Next, Larry described his vision and mission over the next 5 years. He said that he plans on incubating 7 companies in this timeframe. He has already completed one in Fernhill Beverages and number two would be Hollywood Hair Cutters. He explained that these incubated companies will either be SPINOFFS/IPO’s or WHOLLY OWNED SUBSIDIARIES UNDER VGID.
This leads me to the question I asked in the beginning of this blog. Why was there a sell-off after the conference call and was it warranted or the correct call by traders? This is a complex answer, so let me explain. However, before I do, in my humble opinion the CORRECT ANSWER IS NO, IT SHOULD HAVE NEVER HAPPENED. Let me tell you why. The substance of the call from the new products like the CBD Line, Walmart is planning to test market CBD products and we want to be ready when CBD goes main stream, Vitamin Water Antioxidant line – Pump Fitness coming mid year, New Beer Product with set distribution coming around mid year, New Spinoff/IPO- Hollywood Hair Cutters with 3 initial locations opening soon and incubation process already begun, Fernhill Shares 10:1 paid out, 7 new incubated companies to be spun off or be newly formed wholly owned subsidiaries under VGID in the next 5 years – ALL ADD TREMENDOUS VALUE TO V GROUP/VGID shareholders. Additionally, he also stated that there is no current dilution going on and intends to keep the current share structure intact. The bottom line is, The V Group is not your ordinary pink sheet stock and Larry is not your ordinary run of the mill pink ceo. Larry actually cares about his shareholders (*He is the largest common shareholder owning about 50% of the OS) and has grand vision for growth and adding value to the V Group conglomerate. The fact is he has already proven he can get things done as he said he would.
So, I ask again – Why the sell-off after the conference call? Here is why. The fickle, shortsighted mind of many OTC traders is to sell on momentum and volume if you have any profit, and move on to the next one. The attention span of a day trader or trader that likes to flip stock, is about 4 hours on a good day on any particular stock. The fact of the matter is, the opportunity was there for these type of traders to sell with the stocks price run up on prior days from the under .001 to over a half a penny. However, that doesn’t make their liquidations of shares at current levels the right move, time will dictate that. However, if the company delivers on just half of what was discussed on the conference call, it will be a very good success story for VGID shareholders and the stock price should rise dramatically as products and new entities or ipo’s get closer to being rolled out. The bottom line, in my opinion, the stock is worth a lot more than the current valuation with all that is going on fundamentally. If I could put a forward looking value, in my opinion, I would say at least five to ten cents or more in the coming months if the company stays on track and delivers while keeping the share structure in tack. It happens, occasionally you will find a real undervalued gem in OTC land, and when you find a sparkling one, you hold it in your portfolio for a while and not flip it like a pancake. I truly believe shareholders are starting to get it and beginning to understand the V GROUP Inc. moving forward. Traders are realizing that Larry can deliver and that he cares about shareholder value. In OTC land, this is a rare find both in terms product line, company success and goals, and the ceo steering the vision.
As with any stock, please do you own due diligence before purchasing buying, selling, holding, etc. I make no claims you will make money due to the very risky and volatile OTC market. Champion your own investment decisions are always the best advice one can give another.