Integrated Cannabis (OTCMKTS:IGPK) in Free Fall Mode

On April 25, OTC Markets placed a Caveat Emptor sign on Integrated Cannabis (OTCMKTS:IGPK)’s profile. Three day’s later, they removed it. The regulatory organs didn’t say why they decided to pull it down, but we reckon that right now, two weeks later, the more important question is: “Was this the right thing to do?“.

As you probably know, on May 5, seven days after the removal of the skull and crossbones badge, IGPK became the target of an $800 thousand promotional campaign. It’s carried out by one of the most infamous outfits in Pennyland, Stock Castle, and although the pumpers’ reputation is less than stellar (many people complain about receiving unsolicited emails from Stock Castle), the increased awareness did have its effect on the stock.

Two sessions of extreme buying propelled the ticker on a run that culminated in the $0.81 per share 52-week high registered on May 6. Unfortunately, hype and excitement can only get a stock this far.

A Seeking Alpha article appeared and it attacked the company and the promotional campaign that’s being carried out for it. Some people complained that the author, a contributor who goes by the nickname of Penny Stock Realist, is trying to push the ticker down because of his short position, but whatever his motives, he was right about the fact that IGPK is being targeted by a paid pump. He was also right about the suspensions of Stock Castle’s last two picks – Nevada Gold Corp (OTCMKTS:NVGC) and Imogo Mobile Technologies Corp (OTCMKTS:IMTC).

As if that wasn’t bad enough, IGPK‘s financial statement shows that the company isn’t really ready to set the booming marijuana industry on fire. As we mentioned in our own articles, on March 31, IGPK had no assets, no revenues, $34 thousand in liabilities, and an accumulated deficit of around $166 thousand.

With all that in mind, we weren’t really surprised when we saw the stock tumbling down. The people who put too much faith in the pumpers’ emails, however, were quite shocked. Stock Castle tried to calm them down and over the weekend they said that the 40% drop had been nothing more than a “healthy pullback” and announced that IGPK is “poised for another run“.

Apparently, the management team also wanted to see the ticker on the move again and about two hours before yesterday’s opening bell, they issued a press release. Unfortunately, it would appear that they didn’t have anything to announce and instead, they decided to comment on the growth displayed by the cannabis sector and the benefits that it brings to the local economies.

Investors were having none of it. IGPK opened the day at $0.4767 (a small gap up), but started crashing down almost immediately. The closing bell stopped it at $0.29 per share which is more than 35% below last week’s close. About thirty minutes into today’s session, it’s another 17% down.

Once again, we’re not that shocked by the appalling performance, but that said, we are aware of Stock Castle’s track record. Before the NVGC and IMTC disasters, they were pumping Wild Craze Inc (OTCBB:WILDE). The touting propelled the ticker to an all time high of nearly $0.60 on August 20, 2013. Currently it’s sitting at $0.006 per share which goes to show that even when the SEC lets the pump play on (which it seems to be doing right now), things usually end up pear-shaped.

IGPK‘s drop is proving to be much more violent than usual and that brings us back to our initial question: “Was the removal of the Caveat Emptor badge a good call?“. You should decide for yourself. Whatever your opinion, we reckon that the huge losses that the ticker incurred over the last few sessions and the $800 thousand pump job are good enough reasons to tread carefully.