Is Medical Marijuana, Inc. (OTCMKTS:MJNA) Headed Back to Under a Dime?
Yesterday’s trading session pressed the share price of Medical Marijuana, Inc. (OTCMKTS:MJNA) back to $0.100 flat. The ticker went as low as $0.09 intra-day on heavy volume of nearly 20 million shares.
The movement was very likely assisted by an article on SeekingAlpha that went live just before the markets opened yesterday. The piece put forth a number of allegations, more often than not backed by official documents, related to the way MJNA was and still is being run as well as the detachment of Dixie Elixirs’ CEO Tripp Keber from MJNA‘s board and the possible reasons for it. Even though the article was much more restrained in its tone compared to the usual MJNA pieces on SA, it still managed to trigger a wave of selling in the early session.
While the article did not examine any of MJNA‘s counterclaims and even though there may be some commotion around the way MJNA is being run, a very probable reason for the stock’s recent poor performance could be the financial performance of the company. Back in April 2013 MJNA stated expectations of ‘explosive growth, fueled by new products’, as well as greater product penetration and new distribution agreements with companies outside of the sector.
The last two quarterly reports from MJNA showed very little in the way of ‘explosive growth’. Sales figures have been shrinking without the sizable contribution of PhytoSphere, now replaced with CannaVest share and cash installments that save MJNA from logging net loss. In Q2 the company was $324 thousand in the red before extraordinary items (the CannaVest installment for PhytoSphere assets) were factored in. In Q3 MJNA logged negative net ordinary income of $86 thousand. CannaVest shares and cash brought the final net income figure to $7.9 million.
The press announcements coming from MJNA over the better part of this year consisted of product launch news and cannabis expo entries and awards. All this somehow did not culminate in boosted sales numbers in the last report. It could just be that people are getting a little tired of waiting for the money to start flowing in the company’s coffers.
It remains to be seen whether MJNA manages to keep its head over the water or it will indeed slip and remain below $0.10 per share. The latter scenario could lead to further escalation of the drop as more longs abandon ship.
Other big dollar volume movers from yesterday’s session include Marani Brands, Inc. (OTCMKTS:MRIB) who dropped by nearly a quarter, stopping at $0.01 per share. Tiger Oil and Energy, Inc. (OTCMKTS:TGRO), targeted by an ongoing pump campaign, dropped 4% to a close of nearly $0.50.
