SK3 Group Inc (OTCMKTS:SKTO) Rides the Wave of Excitement
Recreational cannabis sales started in the state of Colorado on January 1 and it seems that this was enough of a reason for virtually all penny stocks that are, in one way or another, involved in the marijuana business to explode onto the scene. At first, SK3 Group Inc (OTCMKTS:SKTO) was a bit different.
While the hype was pushing tickers like GreenGro Technologies, Inc. (OTCMKTS:GRNH) and Growlife Inc (OTCBB:PHOT) up the charts, SKTO was losing ground and the first three sessions of 2014 ended with disappointment. On Tuesday, it did manage a healthy 23% bounce but yesterday, it really rocked the OTC Markets.
More than 280 million shares changed hands in just six and a half hours, racking up a dollar volume of $5.68 million. SKTO started climbing the chart at a rapid rate from the very beginning and a press release which came out forty minutes after the opening bell accelerated the ascend further. By the end of the day, SKTO was sitting around 160% above its previous close.
The ticker is valued at over $0.02 for the first time since May 2013 and it seems that the reason for this is a management agreement that they signed yesterday with medical marijuana growers in California who supposedly own around 12 thousand square feet of cultivation. A positive piece of news, no doubt, but is it really enough to justify the record-breaking volumes?
You will need to decide for yourself, but one thing is certain – yesterday’s run is highly reminiscent of the one SKTO made back in March 2013. As you probably know, the company announced its plans to enter the hot medical cannabis business back then and the enthusiasm created by the news dragged the ticker out of the land of the triple zeros and flung it as high as $0.08 in just two weeks.
Unfortunately, the hype dissipated over the next few months and so did the price. SKTO dropped below $0.01 per share in August 2013 and some of the shareholders are probably wondering if they aren’t in for the same treatment once again.
Of course, there will be a lot of investors who will say that SKTO is now a much more solid company and, at least in terms of financials, they’d be right. The latest report shows that the third quarter of 2013 ended with:
- cash: $129 thousand
- current assets: $22.7 million
- current liabilities: $2.3 million
- revenues: $17.5 million
- net income: $3.2 million
The recent press releases suggest that the future is even brighter. On December 13, for example, they announced that they’re starting the distribution of the Dharmanol non-psychoactive tablets which will hopefully bring in more revenues.
The thing is, there has never been a shortage of optimistic developments around SKTO. When you take a look at the previous reports, you’ll see that their financial position has been stable for quite some time as well. And yet, the ticker is refusing to perform. In fact, SKTO‘s behavior is quite horrific considering the strong fundamentals. But is it about to change?
Only time will tell. We’ll make sure to keep a close eye on SKTO over the coming months but in the meantime, if you are contemplating a potential investment, you should be sure to conduct the proper amount of research before putting any money on the line.
