HEMP, INC. (OTCMKTS:HEMP) Headed Up Again
HEMP, INC. (OTCMKTS:HEMP) suffered a hard blow during the sector-wide market crash last week. Luckily for HEMP enthusiasts, market volatility and boastful PR are now pushing the ticker right back up again.
Growlife Inc. (OTCBB:PHOT)’s downfall caused much turmoil, as investors saw the true colors of one of the “pioneers” in the marijuana branch. At that moment, most companies in the cannabis sector had fallen back to the tried and true tactic of waiting for the last possible moment for filing their annual financial reports, then postponing the date even further. This strategy might have allowed some companies to reap the rewards of a high market value before being forced to admit to their shortcomings, but ultimately it turned against them.
HEMP is a good example of why delaying this long can be harmful to a company’s market standing. The company boasted a 26% increase in revenue YOY for 2013, but without solid proof of said growth, the announcement fell on deaf ears and once the market contracted, HEMP tanked with everyone else.
Thankfully for HEMP supporters, the market seizure did not last long. The panic that drove investors into a rabid fit of selling seems to have dissipated somewhat, and as a result HEMP‘s latest announcements are starting to take effect. The optimistic numbers in yesterday’s press release seem to have been just the news that were needed to break the ticker’s rapid descent, and as a direct result HEMP is on the rise again.
This jump may not be entirely unwarranted. If the company really has grown as much as its boastful and vague press releases would have investors believe, HEMP enthusiasts may indeed have cause for joy. Whether the growth is an actual fact or just another publicity stunt aimed at raising the company’s market value should become obvious today, with the filing of HEMP‘s much anticipated annual report for 2013.
Sadly, the news of the $5.5 million revenue for the first quarter of 2014 can’t be verified until at least May 15, but even if it is accurate, investors are advised to keep the following in mind. Even if HEMP did make a revenue of $5.5 million, how much profit could that have generated? How impressive should the company’s progress be to warrant its current market cap of $126 million?
Investors might want to be extra cautious, because if anything in these reports turns out to be less than impressive, HEMP might be in for a bumpy ride.
