Cannabis Science, Inc. (OTCMKTS:CBIS) Bombs On Massive Sale of Shares
It seems that the hype around the marijuana industry from last week was both powerful and short-lived. It managed to boost the share prices of companies big and small to disproportionate highs for a couple of days but now everything is starting to reverse. The perfect example for this is the stock of Cannabis Sciences, Inc. (OTCMKTS:CBIS).
In just four sessions they managed to run from a low of $0.03 to a high of $0.098 or more than a 300% increase. The biggest upwards movement happened on Thursday when they surged by 55% on a truly massive traded volume of 88 million shares compared to the average for the company of 7.7 million shares.
Enthusiasm was still holding strong and on the next day as we already said CBIS climbed up to $0.098 right after the opening bell. But investors decided that it is time to start taking profits. In just a few minutes CBIS slashed nearly a quarter of its value and unable to recover finished the session 24% down at $0.06. Traded volume surpassed the previous one as more than 96 million shares got dumped on the market.
Still even after the crash CBIS is trading two times higher than its pre-hype prices so the stock may go even lower. Especially when you see that currently CBIS have a market cap of $60 million and less than $500 in cash according to the last financial report. More specifically at the end of September CBIS had:
- $462 cash
- $288 thousand total current assets
- $3.5 million total liabilities
- $70 thousand revenues
- $1.1 million net loss
As we said in our previous article, back then CBIS had minimal operations. Their primary source of funds is the issuance of common stock which is getting dangerously high. They have already burned through 760 million shares of the 850 million authorized. Investors should keep in mind that further dilution is almost guaranteed if the company wants to stay in business.
Even if you believe that the patents held by them are capable of carrying the company to a brighter future be sure to do your own research and due diligence before making an investment. Jumping head first into a hyped company is never a good decision unless you can afford the potential losses.
CBIS were certainly not the only marijuana company that took a hit on Friday. In fact almost the entire industry suffered a severe correction with even Medical Marijuana, Inc. (OTCMKTS:MJNA) sliding down by 20% to arrive at $0.152. The only company that was spared was Growlife Inc (OTCBB:PHOT) who managed to post a small 2.7% gain currently trading for $0.20.
