Vystar Corp (OTCMKTS: VYST) had an excellent start to the year rallying by more than 1000% to one-year highs of $0.13. However, the stock crumbled under immense short-selling pressure in February, resulting in a spiral back to the $0.03 level. The plunge came amidst growing concerns about the company’s long-term prospects as a Vytex natural rubber latex producer.
Vystar Price Analysis
After a period of consolidation at the $0.02 level, the stock is once again showing signs of bottoming out on underlying fundamentals showing signs of improvement. The unveiling of a Deproteinized natural rubber latex is the latest development strengthening investor confidence about the company’s growth metrics.
The company’s intellectual portfolio has also received a boost on the awarding of a patent in Brazil for the Vytex rubber latex. A move by Vystar to diversify its business empire with the acquisition of a Rotmans Furniture also continues to excite the markets, consequently strengthening the stock’s market sentiments.
The $0.02 mark has so far acted as a solid support level from where Vystar looks set to plot a comeback after a harrowing plunge in the first half of the year. Recent price action activity indicates the stock faces strong resistance at the $0.05 level. A rally past the $0.05 mark should reaffirm the stock’s break out credentials from current lows.
Conversely, failure to rise and find support above the $0.05 mark could leave Vystar susceptible to further drops. As it stands, the descending trend line gives bears leeway to continue pushing the stock lower.
What Does Vystar Do?
Based in Worcester, Vystar Corporation is an exclusive creator and manufacturer of Vytex Rubber Latex. The multi-patented all-natural raw material is finding great use in over 40,000 products as a natural rubber latex. The company owns the technology for producing Vytex.
Vytex Rubber Latex Development
After a period of consolidation, Vystar has started showing signs of edging higher as investors take note of a flurry of positive developments that affirm the company’s long-term prospects. For starters, the company is fresh from unveiling Deproteinized natural rubber latex that will act as a platform for sustainable grades of latex and solid rubbers.
According to Ranjit K. Matthan, the removal of proteins and non-rubbers from rubber and latex is an important milestone in the creation of environmentally friendly raw materials. The new process also paves the way for Vystar to engage industry partners in a bid to customize rubber products to their requirements.
Vystar has since secured a Patent Notice of Allowance for the Deproteinization of Vytex Natural Rubber Latex. The company now holds 12 international and four domestic patents touching on the latex depronetization process. The patent allowance in Brazil is of great importance as the country is the tenth-largest supplier of latex.
“This notice of allowance provides important intellectual property (IP) protection for Vystar in the Brazilian market as we build relationships with latex producers and manufacturers there who are aggressively attempting to expand,” said Steve Rotman, CEO of Vystar.
Rotman Furniture Boost
In addition to pursuing opportunities for growth around Vytex Natural Rubber, Vystar has also moved to diversify its revenue stream. The company has entered into an agreement to acquire Murida Furniture Company, Rotmans Furniture, and Carpet.
The acquisition provides Vystar with exposure to the largest furniture and flooring store in New England. Rotmans is one of the largest independent furniture retailers in the U.S. Rotmans with its gross revenue of $30 million should be a great addition to Vystar.
“Additionally, it will offer significant marketing and advertising opportunities for all of Vystar’s brands to Rotmans’ thousands of existing customers. The acquisition is expected to dramatically increase Vystar shareholder value and liquidity,” stated Steve Rotman, CEO of Vystar and CEO of Rotmans.
Vystar has taken significant hit after a stellar start to the year. While the underperformance in recent past is a point of concern, one cannot dispute the fact that the future can only get bright for the Vytex Natural rubber creator.
Intellectual property strengthening, as well as commercialization of the Vytex natural rubber, are some of the catalysts likely to trigger renewed investor interest in the stock. The acquisition of Rotman with over $30 million in annual gross revenue is another factor that justifies a higher valuation for VYST.
At current levels, VYST is an attractive risk/reward play as we believe the lows are finally in. Better days are ahead for VYST.
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Disclosure: We have no position in VYST and have not been compensated for this article.