First, let me state up front, I am a holder of VEND and have been for several years, long before the yogurt part. That was for a product that obviously was an attempt to enter a saturated market with a slightly new twist and it obviously was a speculative bet that it might work well enough to make some money. It didn't but some things have changed. My thoughts. Sorry for the long post.
I doubt that most people buy OTC shares because they think that they have found a can’t lose company. They think, or at least I suspect they do, that 10,000.00, say at 1.00 per share, will return a much better profit if the shares just double and if it is one of the occasional home runs the sky is the limit. Why speculate otherwise? On the other hand, 10,000.00 in Apple or Amazon or Walmart or other “safe” company (how safe were AOL, Kmart, Sears, Nokia or many other companies on the brink of destruction or gone by the way) would be perhaps 100 shares or less, much less in some cases. Even a 10.00 share increase would be nice but not life altering. The reason to buy such companies is because you are playing with retirement plans or other future need money and you hope for the conventional 5 to 7 percent per year for twenty plus years. If one is a multimillionaire who can buy tens of thousands of shares of a “safe” company some significant dollars can be made overnight but how many of us on this site fit that description? If you are investing only money that you cannot afford to lose then a slow rise in the “safe” stocks makes sense.
However, if you have some dollars left over, dollars that you buy lottery tickets with or go to the casino with or otherwise just spend, then speculation is perhaps fun, a gamble worth trying for some. Now that is not to say throw a dart at the OTC listings and buy what you hit. DD is wise with OTC to try to find at least a glimmer of possibility.DD is wise with mega company stocks too. But you can dd it to death with OTCs. At some point you have to say that though there are negatives (there are negatives with even high fliers too) there are enough compelling points to make a run at it, worth the risk with play money, not can’t do without money. If you hit it big, there is the reward. That is the reason we buy such stocks, or put money in a slot machine or bet on horses for that matter. Who on this site thinks, or thought, that this company was/is a can’t miss future MacDonalds? Not me, but in my experience, I have made more money with some OTC stocks than I have with any of those other investments except by waiting for years of compounding. The latter is for my IRA money. If I had put the same amount of money in MacDonalds or Amazon or Exxon instead, on the day I bought VEND, I would not be notably richer today either.
My point is, I guess, that all of the machinations over VEND or Yates or the cost of machines or locations or 2.68 a share falling to .90 a share, and so on, are a waste of time. Either you bought the shares, hopefully with money that you could afford to lose, and crossed your fingers or you probably should have taken the family on a vacation with the money. The long list of Negative DD findings mean nothing of consequence. If I get tired of wrestling with the ups and downs in the price, I’ll bail. Otherwise, there are also reasons to think that the concept just might work, at least long enough to make a nice return even if it doesn’t last to become a Papa John’s or Outback or any other long lived food marketing concept that has a New Year’s day bowl named for them.
It is at least comforting to know that several self-made millionaires, including Phil Mickleson, have bought franchises. I have to assume that most, if not all of them, made and maintain their millions by being astute business people. They bought yogurt franchises, and some also bought shares, after doing their own dd and thus they risked far more dollars than any of us have. They must have understood up front that the machines are 50k apiece, that VEND wants 12.5 percent as well as possible supply chain control (don’t MacDonald franchisees pay royalties, buy fries and cups and bags and boxes from MacDonalds or subsidiaries?), that location, location, location is paramount and that brick and mortar shops abound? I am, eyes wide open and fingers crossed, still in.
