Easton Pharmaceuticals Inc (OTCMKTS:EAPH) Are Not Done Yet
That is correct. The pump is still on. The emails have been flying around virtually non stop, but this time, we don’t think that they are the main reason for Easton Pharmaceuticals Inc (OTCMKTS:EAPH)’s surge of 36% and the colossal trading volume of around 27 million shares (keep in mind that the average one for the last three months is just 0.9 million). But if it wasn’t the email, then what was it?
Well, it could be only one thing – a press release. But not just any kind of press release. Only an entrance into the medical marijuana business could cause such a spike. We have to admit, we weren’t expecting that EAPH of all companies would turn to the weed industry, but we also have to admit that when we read through the announcement, we laughed a bit. Still, when the time came to write the article, we put our serious faces on and started asking questions. The first of which is: “Will they be able to make it?”.
Take a look at it from this point: every now and then we see a penny stock company claiming that they’re entering the multi-billion dollar market for medical pot where they will be extremely successful. The investors, particularly the more inexperienced ones, have read somewhere (often in a paid pumper’s email) that the industry is scorching hot at the moment and they scramble to grab some shares while they’re still cheap. The demand increases and so does that price. The value could double and even triple in a single day sometimes. Then something happens. The ticker starts its descend and when the double zeroes appear, traders start to realize just how much of a mistake the whole thing was. And if you think that we’re just making those things up, we would urge you to have a look at the charts for Creative Edge Nutrition Inc (OTCMKTS:FITX) and Latteno Food Corp (OTCMKTS:LATF). These are just two penny stock ventures that followed the scenario above to the letter.
“Still,” – some of you are saying right now – “EAPH could be different and in the interest of fairness you have to give them a chance and do a proper research.”.
We have done the research and we have written about them many times. We have also read through their financial statements and we’ve already seen that when they started off back in 1997 they had a plan of developing a wide variety of pharmaceutical products. By the beginning of 2013 they were left with nothing but the promises of the Viorra gel that was supposed to be on the shelves by June. As you might have guessed, it still isn’t and while they say in the press release that they will continue developing it, we’re struggling to see them taking care of that while simultaneously building their medical weed business.
And even if you are keen on trusting their expertise and even if the press release of the new COO joining the team is enough to get you excited, you should keep in mind that they’re trying to succeed with:
- no cash
- current assets: $137 thousand in prepaid expenses
- current liabilities: $474 thousand
- no revenue since inception
- quarterly net loss: $22 thousand
If you think that these figures suggest even a remote possibility of EAPH being successful, you might consider their shares as an investment option. But you should probably bear in mind that right now, just an hour into today’s session, the ticker is already around 22% below yesterday’s close.