Cannabis Science Inc (OTCMKTS:CBIS) Sinks To New 52-Week Lows
Last Thursday Cannabis Science Inc (OTCMKTS:CBIS) published a new PR announcing the acquisition of Equi-Pharm LLC, a USA manufacturer and distributor of specialty horse and pet grooming and topical applications. The positive news helped the stock of the company to close the day with a gain of 8.2% at $0.033. The above-average amount of 5.4 million shares changed hands that day.
Those investors who thought that the positive outcome of the session could signal that CBIS may be making a recovery were left bitterly disappointed when on the very next day the company wiped its gains closing 7.6% in the red at $0.0305. During the trading day the ticker actually dropped down to a new 52-week low of $0.0301.
If you have read any of our articles about the company you should know that trading its stock is extremely risky. The red flags around CBIS are both numerous and extremely serious. The financial state of the company at the end of 2014 was nothing short of atrocious:
• $10 thousand cash
• $166 thousand total current assets
• $3.95 million total liabilities
• $1031 revenues
• $16.8 million net loss
Apparently last year CBIS managed to generate around $82 dollars per month in revenues. At the same time their losses are continuing to mount with the accumulated deficit since inception now sitting at $109 million. By May 15 CBIS should submit their financial report for the first quarter of 2015 and if the numbers in it are equally as depressing the stock could fall to new record lows.
On numerous occasions in our articles we have talked about the fact that millions of shares have been, and are still being, issued to insiders of the company through multiple Stock Compensation Plans. And thanks to the form 4s that have been filed you can see that some of the people who received these shares have been selling them on the open market quite regularly.
With the PRs issued by the company having lesser and lesser impact on the movement of the stock CBIS will find it extremely hard to reverse the downwards slide of their stock. Since the start of the year the ticker has lost 60% of its value and as you go further back the chart the losses only get bigger. Even after this massive depreciation CBIS still command a market cap of $36 million at the moment. It is up to you to decide if such valuations can be supported by the fundamentals of the company.
