Legends Business Group, Inc. (OTCMKTS:LGBS) Spikes Before The Weekend
For the past couple of months the craze around the marijuana industry has been constantly subsiding. The boundless enthusiasm disappeared due to the numerous marijuana pennystocks suspended by the SEC and investors became less eager to jump into a stock just because it featured the word marijuana in a press article. Well, judging by Friday’s performance of Legends Business Group, Inc (OTCMKTS:LGBS) some traders still believe in the hype around the industry.
At the start of the year LGBS stated that they are in ongoing negotiations with cannabis companies but that was all – they never made an official PR about the results of those negotiations. That changed last Friday when just an hour and a half before the end of the session LGBS announced that they have signed a letter of intent for a joint venture with a full service cannabis company.
The news caught the attention of the market almost immediately and in just that hour and a half investors managed to shift 159 million shares. For comparison the average daily volume for the company stands at 9.1 million. The buying pressure boosted the stock upwards by 18% and at the end of the day LGBS found itself at $0.0019 per share. Certainly an impressive performance but can the company keep these gains?
The PR was devoid of any useful information. It didn’t mention the name of the joint venture partner and no details about the terms of the deal were revealed. In fact, this rather important event for the company was reported in a single sentence.
The financial situation of the company isn’t exactly encouraging, either. At the end of the first quarter of 2014 LGBS reported the following results:
The financial situation of the company isn’t exactly encouraging, either. At the end of the first quarter of 2014 LGBS reported the following results:
- $5427 cash
- $6477 total current assets
- $298 thousand total current liabilities
- ZERO revenues
- $25 thousand net loss
With such limited financials it is rather doubtful that the company is even capable of moving forward with its business plan.
The CEO of company – Mr. Bill Schaefer, is also at the helm of another pennystock that is nearly identical to LGBS. Strategic Rare Earth Metals, Inc. (OTCMKTS:SREH) announced that they will be entering the medical marijuana industry at the same time as LGBS and are in an equally depressing state with just $1700 in total current assets and zero revenues for the quarter ending March 31.
The CEO of company – Mr. Bill Schaefer, is also at the helm of another pennystock that is nearly identical to LGBS. Strategic Rare Earth Metals, Inc. (OTCMKTS:SREH) announced that they will be entering the medical marijuana industry at the same time as LGBS and are in an equally depressing state with just $1700 in total current assets and zero revenues for the quarter ending March 31.
The massive red flags demand the use of caution. The stock is extremely risky and at these cheap price ranges it could retrace its steps backwards equally as fast. In order to avoid any unnecessary losses doing your own extensive research 
should precede any trades involving pennystocks.
should precede any trades involving pennystocks. On Friday the stock of Terra Tech Corp. (OTCMKTS:TRTC) continued to lose positions and it dropped another 10% ending the week at $0.472. Many thought that the fact that TRTC successfully received permits for the cultivation and production of marijuana was going to lift the stock upwards but it has been correcting for the past three sessions.
