Cannabis Science Inc (OTCMKTS:CBIS)’s Resurgence Didn’t Last
The stock of Cannabis Science Inc (OTCMKTS:CBIS) managed to post three green sessions in a row reaching up to $0.045 per share. The positive momentum quickly dissipated though and for the last two sessions the company has been going back down. On Tuesday the ticker kept the losses to a minimum and closed just a little over 1% in the red but yesterday it crashed hard.
CBIS opened at $0.0395, spiked to a high of $0.4 shortly after the opening bell but quickly began sliding downwards wiping more than 10% and sitting at $0.035 when the closing bell rang. Investors were eager to shed their holdings resulting in a daily volume of 6.2 million shares.
The fact that CBIS has returned to crashing down the chart shouldn’t come as a surprise if you have followed our articles about the company. The stock is simply surrounded by red flags and all of them are serious enough to demand the use of caution. Let’s start with the annual report for 2014 that was filed last Tuesday. Even a single glance at the numbers found inside will be enough to show you how dire CBIS’ financial state really is:
• $10 thousand cash
• $166 thousand total current assets
• $3.95 million total liabilities
• $1031 revenues
• $16.8 million net loss
Although the balance sheet speaks volumes even by itself the risks around the stock are far from over. We have oftentimes warned you about the fact that despite the horrific results of the company’s operations millions of discounted shares have been issued as bonuses to insiders. Last year three stock compensation plans were registered and a total of 52 million shares were issued under them. For 2015 another plan was adopted with the S-8 form filed on March 25 which registered another 50 million shares.
Well, some of the people who received these shares have been dumping them on the open market quite regularly. In fact, in our previous article we warned you that since the start of the year eight Form 4s have been filed detailing the trades of the company’s insiders. And wouldn’t you know it yesterday another Form 4 got submitted. It revealed that the COO of the company sold around a million shares during the three sessions between April 27 and April 29.
Since the start of the year the stock of the company has wiped close to 60% of its value compared to the high of $0.08 posted in early-January and the picture only gets worse as you move further back the chart. In addition the issuance of new shares has led to a massive dilution of the common stock with the outstanding shares of the company surpassing the 1 billion mark at the end of 2014. As of April 17, this year, CBIS had 1.18 billion outstanding shares.
Ultimately it is up to you to decide whether CBIS is a sound investment choice or not. Just keep in mind that at the moment the company commands a market cap of over $41 million.
