Hemp Inc (OTCMKTS:HEMP) Remains Volatile

tags: HEMP

From over 4 cents the previous day to a close at less than $0.025 on June 22 representing a loss of 40%, that were the consequences for Hemp Inc (OTCMKTS:HEMP) after investors had learned that the Securities and Exchange Commission had filed charges for securities fraud against the company and its CEO, Mr. Bruce Perlowin. Despite the seriousness of the allegations, according to the SEC complaint the defendants had a long-running scheme that resulted in the sale of hundreds of millions of “unregistered and purportedly unrestricted Hemp shares”, after the immediate sell-off investors changed their mind and showed considerable support for the company.

Following the severe crash HEMP went on and registered four consecutive sessions of gains that saw it climb all the way back to $0.035 at the end of Tuesday’s session. Yesterday, however, the stock crumbled once more and after slashing more than 14% of its value it fell to a close at exactly 3 cents per share.

It is clear that HEMP will continue to display heightened volatility in the sessions to come. The fact that a company that usually issues a new PR every couple of days has been silent for over a week could also be viewed as an warning sign.

While some investors on the various discussion boards appear to be unconcerned about the SEC lawsuit it should be noted that HEMP was riddled with red flags even before that. The Temafa decortication plant HEMP is building in Spring Hope, North Carolina, has so far gone through a considerable amount of delays, or maybe the company has been announcing truly unrealistic deadlines. After all, HEMP‘s initial projections were for the facility to be operational by the first quarter of 2015. Over a year later the company still has a lot of work before it completes the assembly of the plant. In fact, the last time HEMP even mentioned a deadline was way back in January when they were talking about getting everything fully operational by the second quarter of the year. This period ends today.

No matter how strongly you believe in the legalization of hemp and its potential you shouldn’t overlook the myriad of risks surrounding the company. Before putting any amount of money on the like you should take the necessary time to do thorough due diligence.

In early trading today HEMP jumped up by 3.3% but is currently sitting flat at $0.3.