According to the Commission’s complaint, issued in August 2009, The M Group, Inc., d/b/a Bamboosa, and its principals falsely claimed that the company’s products are “100% bamboo fiber,” when they are composed of rayon. Rayon is a man-made fiber created from the cellulose found in plants and trees and dissolved with a harsh chemical that releases hazardous air pollution. Any plant or tree could be used as the cellulose source – including bamboo – but the fiber that is created is rayon.
The complaint also charged Bamboosa with making a number of other deceptive “green” claims. Bamboosa claimed that its products retain bamboo’s antimicrobial properties. However, even if the rayon used in Bamboosa’s clothing and textile products is manufactured using bamboo as the cellulose source, the FTC contends, rayon does not retain any natural antimicrobial properties of the bamboo plant. The rayon manufacturing process eliminates any of these natural bamboo properties.
Recommendation: You may have read our initial diligence on Bamboosa called “Why I Do, and Why You SHOULD, Have a Bambooner” in which we erected a strong case for buying Bamboosa. The thrust of that piece lay in this quote: “There are two O’s and a BAM up in this piece, time to get long (I think I just did).” We were bamboozled, legitimately bamboozled, and we deserve a pass on this one, because really, that’s a cool way to lose millions for investors who depend on the legitimacy of our recommendations. I know you’d agree.
HT to Felix Salmon