Hemp, Inc. (OTCMKTS:HEMP) Is Still Soaring
Hemp, Inc. (OTCMKTS:HEMP) managed to increase its market value 11.32% yesterday, once more driven up by the investor’s expectations of good things to come when the poll results from today’s voting come in.
As can be seen from the charts, HEMP‘s initial surge up was fueled by a Forbes article praising industrial hemp, and then picked up and blown, some say – out of proportion, in the general hype surrounding the newest marijuana developments.
Many investors got excited about the prospect of Oregon and Alaska making pot legal – and by the way things look, that may not have been entirely unreasonable.
As reported by NBC News, it seems that marijuana supporters are ahead in this race, meaning that marijuana may well become legal in the above mentioned states. One does not need to be a market specialist to see how that would benefit pot-stocks throughout the US.
Logic dictates that legalizing marijuana and hemp will give companies such as HEMP an opportunity to capitalize on the market. However, due diligence on HEMP reveals that it may not be among the strongest contestants in this race for hemp domination. Why?
HEMP included some very impressive numbers in its latest financial report.
- Total current assets – $4.84 million
- Total assets – $7.3 million
- Quarterly revenues – $2.36 million
- Quarterly net income – $1.82 million
- Current assets (Securities held for sale) – $4.61 million
However once you realize that $4.61 million of its total current assets are in the form of securities held for sale, also known as highly-illiquid stock, the picture becomes a lot uglier. The number written under “net income” is also deceptive – that is the sum at which HEMP values the stock with which it was compensated for services rendered. Alleged services that it wasn’t paid in cash for. Which brings us to the point:
- Cash – $42 thousand
- Inventory – $185 thousand
Those are the company’s true colors, once you ignore the nice little bit of creative accounting. Investors are advised to take the last two numbers into consideration as they decide for themselves whether or not HEMP will be able to capitalize on the hemp market any time soon.
