Hemp, Inc. (OTCMKTS:HEMP) Gliding Down Slowly
Hemp, Inc. (OTCMKTS:HEMP) had a nasty tumble on Dec. 2, which cost it nearly 10% of its market value, but to the relief of its supporters, this sudden and violent crash did not last. The company has been falling slowly down ever since.
The ticker fell just 2.54% during yesterday’s session, which is certainly good news for HEMP enthusiasts. Why?
Because, as it is, HEMP shares extremely overpriced, even if it is currently worth $0.03 a pop. Let us just put things into perspective.
HEMP is a marijuana penny stock that has a market cap of $77 million. At the same time, it is a company whose latest financial report looked like this:
- Cash – $1111 cash
- Total current assets – $5.1 million
- Total current liabilities – $957 thousand
- Sales – $14 thousand
- Net loss from operations – $2.3 million
At first glance it may appear that the total current assets are the company’s sole redeeming quality. Further research yields a grim revelation – this is not really the case, as $4.1 million of those $5.1 million are in the form of highly illiquid stock, that HEMP has received as compensation from its dubious clients and/or partners. So, the company’s real, liquid assets are worth about a million dollars.
And if the poor figures and the creative accounting isn’t bad enough, the company’s share structure is positively horrifying. Currently, it has 2.6 BILLION shares authorized. To put things into perspective – as of 12.31.2013, its total shares outstanding were 1.8 billion.
That’s why, as it stands, the big surprise isn’t that HEMP is currently on its way to the bottom of the charts. The only real mystery is – why hasn’t it hit double-zeros yet?
Still, at the end of the day, it is up to investors to decide if they want to commit to such a financially weak, dilution-ridden stock. In any case – there is one thing that they should keep in mind – the company’s authorized share cap is currently 3 billion, so there certainly is room for more dilution.
