Replies to post #238573 on Bebida Beverage Company (BBDA)

[WhiteFish]

So we must also agree that the sales must be believable too.

[ToldYaSo]

Ok....I think I am getting this now....

...believed financials make the PPS, along with a number of other factors. Financials nail down FMV if believed. All stocks are traded on the perceptions of iinvestors, which can over or undevalued.

(bold added by me for clarification)

Soooo....it seems to me that what you are saying is that if a company can somehow convey the perception that it is doing better than it really is, then the pps will be higher than it really should be.

To extrapolate from the above conclusion, then I would postulate that you are inferring that: a non-reporting, pink sheet company's value is supported by both the investors perception/analyzation of unaudited or incomplete financials (if submitted by the company), AND investors perception of the sales/growth of the company.

Therefore--by extension--the quandary that such company faces is basically: if financials (if submitted) cannot be relied on, then how do we raise the perception of the investor that the company is doing well. (obviously, if the company does not even submit financials then the question becomes more urgent)

Logic would dictate that the company would thus need to inform investors of any planned/in process actions that the company was making on a frequent basis--probably through extensive use of press releases--in order to overcome the questionable financials, ie: sales expansions, new products, distributorships, etc.

Of course, to an interested investor, since the company's financials are not to be relied upon the verification of such sales inroads and increases becomes quite important. The potential investor would probably want to be able to visit the store that was just announced as a retailer of the company's product to see the product placement on the shelves, or purchase the product to try it out; or they might want to call the distributor that the company mentioned in a press release to get an idea of how sales are going for them.

Naturally, if such above examination of the press releases reveals to the investor that the distributor has not received the product, or the product is not selling well, or the store that was going to stock the product does not have the product on the shelves, then this would create a negative impression on the investor, and thus the investor's perception of the value of the company would decline, leading to a similar decline in the pps.

At this point, in order to combat the declining pps, the company might find itself issuing even more press releases in an effort to shore up the pps.

The company could easily find itself in an endless loop of share pps decline and press releases to prop it up in it's effort to distance itself from the Schrodinger's cat conundrum of it's financials.

Sorry this was so long, but I do have a tendency to get a bit verbose at times, however--does that pretty well sum it up?