Megola, Inc. (OTCMKTS:MGON) Storms The Charts
We can’t say that Megola, Inc. (OTCMKTS:MGON)’s stock isn’t exactly trending in the OTC markets, but the recent sessions have been a great success for the few people that were interested in the ticker and will surely attract more attention to the company.
As last week came to a close, MGON began to climb the charts swiftly and the volumes increased. What is interesting is that this happened for no apparent reason. There were no optimistic news about the company or any press releases and so far we haven’t seen any sign of a paid promotional campaign.
The last time we heard from MGON was back in November 2013, after which they went quiet. The only new piece of information is an interim financial report for the period ended January 31, 2014, but in our opinion, the numbers contained in it are highly unlikely to cause the company stock to make such movements.
- cash: $1,163
- current assets: $1,163!
- total liabilities: $205 thousand
- 6 month revenues: $0
- 6 month net loss: $30 thousand
These grim numbers were made available under the alternative reporting standard in the OTC markets on April 24 and oddly enough the stock got fired up at around noon the next day, to go and close with a 70% gain, at $0.085 per share.
The volume was around 5 times the average, but the 1.1 million traded shares were insufficient to produce a high trade value at that price. Considering the bad financial state of the company that was just made public, we were considering that things might cool off over the weekend.
Still, that didn’t happen and the mystery run of MGON continued, as the ticker added another good 88% to its value and closed the first session of this week at $0.16. The total amount of shares that switched hands during the day came at 2.2 million and they were enough to generate a higher dollar volume of $316 thousand this time.
The movements might be connected to the fact that MGON has updated their website and it is obvious that they have decided to are enter the medical marijuana sector. This is surely enough to provide for the recent good run, despite the lack of optimistic news.
But, you have to remember that by now there are just way too many companies that have decided to take this path for the sole purpose of pushing their stock prices higher and are most probably never even going to make an effort to produce anything.
A recent example of a company that is entering the MMJ scene, even though it looks like its management don’t know a thing about it, is Quasar Aerospace Industries, Inc. (OTCMKTS:QASP). Just ask yourself this – What does an aerospace company have to do with weed and what level of expertise do you think that the people leading it will have in that field?
Of course, they can hire experts to aid their business plan, but it is still uncertain if they will become successful so it is always a good idea for you to do your due diligence and weigh out the risks before making an investment choice, especially when dealing with newly fledged cannabis stocks.
