HPC POS Systems Corp. (OTCMKTS:HPCS) Rising On News
HPC POS Systems Corp. (OTCMKTS:HPCS) was just another penny stock at the bottom of the charts and it didn’t seem like things could change. At the moment, however, there is one thing that you can do, which will apparently attract a lot of interest and some good price gains.
It’s simple. All you have to do is to make an announcement that your company has decided to enter the medical marijuana sector and your stock will explode. This is the exact thing that happened to HPCS and triggered their run last week.
On Monday, HPCS announced that it is entering the marijuana sector with its Cool Breez E-cigarettes. This led to an immediate increase both in price and volume and the company closed the next day with a massive 252% jump.
The overall gain that HPCS made in the course of the week came to a total of 700% and it seems that the people have forgotten the latest financial report of the company just like they did with ProTek Capital, Inc. (OTCMKTS:PRPM), who also had a hot trading week after announcing their plans to enter the sector.
You can check the numbers of prime interest from their annual report covering the period ended September 30, 2013 and be the judge for yourself.
- cash: $396
- current assets: $2.5 thousand
- total assets: $1.3 million
- total current liabilities: $639 thousand
- revenues: $158 thousand
- net loss: $6.4 million
As you can see, the situation isn’t exactly rosy and the net losses that the company is recording are massive. What’s even more bothering is the fact that more than half of the net loss is due to general and administrative costs needed to produce a mere $158 thousand in revenues.
All in all, HPCS (and any other stock that suddenly decided to enter the medical marijuana sector after the hype began) is a risky stock and we would advise you to do your due diligence and weigh out the risks, before jumping in on optimistic news.
At the same time, medical marijuana stocks such as Cannabis Science, Inc. (OTCMKTS:CBIS) and Hemp, Inc. (OTCMKTS:HEMP) have reached such high market caps that they are currently sliding down so that might be the reason for which people are attracted to these “new” players.
