Fastfunds Financial Corporation (OTCMKTS:FFFC) Surges Up After an Update

On January 22, Fastfunds Financial Corporation (OTCMKTS:FFFC) announced that they have formed a subsidiary which will help start-up companies in the medical marijuana industry.

Nine days later, another small cap enterprise, Singlepoint Inc (OTCMKTS:SING), announced that they too want a piece of the hottest sector in Pennyland. They said that they want to develop a special mobile payment solution for use by the cannabis dispensaries.

If you have been following our articles closely, you know that there were one or two things we weren’t quite so sure about.

In the case of FFFC, they said that they are going to provide newcomers to the marijuana industry with some financing when, in actual fact, they themselves are in a desperate need for cash. Details around partnerships were also non-existent which made the future quite uncertain.

At the same time, SING‘s idea sounds smart, but, as you probably know, there are still some banking restrictions on the marijuana businesses and the management team seem reluctant to give us the details on their plans to get around them.

Despite this, the two stocks were climbing up the charts with confidence. FFFC did experience one or two corrections but, on the whole, its performance was impressive. SING‘s ascend was even more explosive – in just four sessions, it manage to rack up cumulative gains of more than 1,000%.

Yesterday, about an hour and a half before the opening bell, the two companies announced that they are now joining forces. Apparently, an agreement has been signed according to which FFFC will provide SING with management services and will give them advise on where to seek financing. The management teams are mightily excited about the new opportunities and are confident about the bright future for their enterprises.

Predictably, the press release did cause some stir among investors, but the market’s reaction was not quite as explosive as everyone expected. While FFFC did manage to register a climb of 50%, SIGN faltered and slid by as much as 14%. Nevertheless, investors are confident that yesterday’s drop is actually a normal consolidation triggered by the colossal surge from the previous days. The next few sessions will tell us if this is indeed the case and they should show us if FFFC‘s future is bright or not. In the meantime, the question marks around the two companies remain.

As you can see from our previous article on FFFC, they have some serious financial issues that need to be addressed. An 8-K form which was filed just a few hours after our latest coverage was published confirmed our suspicions about the share structure and on January 23, we mentioned that there are some red flags around the current CEO as well.

SING, on the other hand, have come a long way since they changed their name and ticker symbol back in July. The company seems to be a fully-functioning entity and they did register respectable revenues during the third quarter of 2013. That said, we can’t ignore the fact that their company headquarters is a residential house in Phoenix, Arizona and the continuous promotional pressure exerted by several newsletters.

The hype still seems to support the two tickers at respectable levels. Traders who jumped in early are seeing their investments grow, but sooner or later, the enthusiasm will need to give way to actual results of the companies’ business operations. That’s when things might turn out to be a bit disappointing which is why doing a lot of due diligence and weighing the risks carefully is absolutely essential.