Does Bebida Beverage Company (PINKSHEETS: BBDA) Have What it Takes to Make an Impact with Liquid Relaxation Products?

Bebida Beverage Company (PINKSHEETS: BBDA) put together a massive day of trading volume on Tuesday, closing the session with more than 235 million shares moving hands, and that activity had a positive effect on the company’s share price as they hit a 52-week high of 0.0097 before sliding back down to 0.0063 when the final bell sounded; BBDA actually closed the day down 18% after opening the day’s session at 0.0086. Even with the disappointing close shares of BBDA are significantly better off than they were just last week when they sat at 0.0028, less than a month ago when they were at 0.0015, and just shy of two months ago when they were at a 52-week low of 0.0003. So what has triggered the climb for BBDA? Well a series of press releases has certainly played up their prospects as a developer, manufacturer and marketer of liquid relaxation products, and a recent promotional campaign has highlighted the company, pointing to the potential that exists in the growing global market for liquid relaxation products. Obviously the market for these drinks is flooded with products and while the majority may be focused on providing the consumer with more energy it’s not as if BBDA is without competition for their relaxation products. That being said, BBDA has been rather aggressive in getting their KOMA UNWIND product on shelves, announcing on Tuesday they had a partnership agreement with Amagra LLC in which the distribution company would distribute KOMA UNWIND “to a significant area of northern California which will include San Jose, the third largest city in California, with a population of 7.6 million people, Alameda County which includes the East Bay region with a population of over 1.5 million people and the Sacramento area, the 4th largest population center in California.” CEO Brian Weber has said the company is committed to pushing their products into as many markets as possible, saying “As I have said so many times before, if there is a nook or cranny in this country that does not carry our products, we will seek to fill that void.” For a shareholder that is certainly good news, or at least a start to good news, but that doesn’t necessarily mean that BBDA is on the brink of something big. Investors should get a better understanding of what wider distribution does for BBDA relatively soon as the company announced back in late June that “an aggressive rollout and marketing plan is being put in place to maximize sales in South Carolina stores starting on August 1st, 2012.” What makes this story something to follow is the fact BBDA stated in that release “KOMA UNWIND Liquid Relaxation will soon be found in all 78 Walmart Stores located in the Palmetto State of South Carolina.” While tapping into the chain of Walmart stores sounds impressive, giving BBDA increased exposure for their KOMA UNWIND product; it should be known that the chain doesn’t always produce the most favorable results for the companies who distribute the products they carry. That’s not to say that BBDA won’t benefit from having their product in Walmart, only it may not be the goldmine it is being made out to be. Interestingly, BBDA has also made reference to expanding their efforts into Euro-Asia, something Weber touched on in Tuesday’s release, saying “I cannot wait to tell the world about.” With very few details currently available on this development it may not be wise to hold your breath. For all of the activity surrounding BBDA at the moment there are certainly some red flags that investors should take notice of, namely the 1.5 billion authorized shares that exist and the lack of access to any concrete figures related to sales of their products. This is an extremely competitive market that BBDA is trying to tackle and as has been noted by the company it is also a one in which their target demographic is “notoriously mercurial.” BBDA stated in their annual report that this fact “obviates the Company’s ability to realistically count on long-term revenues from specific product offerings or to rely on a substantial degree of brand loyalty.” Right now BBDA is flying high with their trading activity at an impressive level and their share price holding at an elevated level but that could all come crashing down if they don’t start delivering impressive revenues from their efforts. There is also considerable risk that when the recent promotional campaign closes the company’s share price will take a hit.