Discovery Minerals Ltd. (OTCMKTS:DSCR) Surges on New Marijuana PR
On February 26 Discovery Minerals Ltd. (OTCMKTS:DSCR) joined the ranks of rock-bottom pennystocks that have decided to join the marijuana industry in order to boost their stock prices. Thanks to all the unbound optimism still holding strong among investors DSCR shot for the sky on the day of the announcement by logging in 220% of gains and closing at $0.0032. Traders managed to shift more than a billion shares which is an all-time record for the company.
The company is certainly not losing any time and signed a letter of intent with VPR Group, Inc., a distributor of e-cigs for medical purposes. This is in addition to the real estate opportunities in the marijuana industry pursued by their wholly owned subsidiary Deer Park Development Corp. Despite the positive PRs the stock of the company started to rapidly lose positions and last week found itself dropping to $0.0022.
Still DSCR was able to once again entice investors back with a press article published early in the morning on Friday. In it they said that Deer Park has already found several possible acquisitions targets. Apparently this was quite enough and traded volume rose by nearly 10 times to 205 million compared to the previous session, the stock added close to 40% and at the time of the closing bell was sitting at $0.0032.
As almost all of the pennsytocks that switched to the marijuana industry in the last two months though DSCR is riddled with red flags. They have no real operations in the overly-hyped sector and their recent ventures into gold mining have left them with rather depressing financials. At the end of 2013 DSCR had:
- $327 cash and total current assets !!!
- $7333 total assets
- $762 thousand total current liabilities
- ZERO revenues since inception
- $124 thousand net loss
The share structure of the company is equally as depressing. Even after the CEO retired 1 billion of his own shares there are still 1.3 billion shares outstanding out of the 2.9 billion authorized.
Do your own due diligence and avoid jumping into a stock based solely on hype. DSCR may try to keep the momentum going on through more PR statements but for now the company remains an extremely risky bet.
Not to mention that just last Friday the SEC intervened and suspended the stock of Petrotech Oil & Gas Inc (OTCMKTS:PTOG), another mining company that left their previous business in favor of the marijuana sector. Ultimately the low-budget pump that was touting their stock must have caught the attention both the SEC and FINRA. The reasons cited for the suspension are “questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the company’s operations.”
