ML Capital Group Inc. (OTCBB:MLCG) Makes A Strong Bounce
The stock of ML Capital Group Inc. (OTCBB:MLCG) managed to finally stop its depressing chart performance after making an impressive move in the right direction during yesterday’s trading. Starting from an opening price of just $0.0016 it reached an intraday high of $0.0069 and although it couldn’t maintain such prices the stock still closed the session with a gain of over 166% at $0.004. Equally as impressive was the traded volume of 62 million shares that surpassed the average for the company by close to 30 times.
The huge gains cannot be denied but there is no immediately obvious reason for the sharp reversal and it is more than likely just a bounce after MLCG hit its new 52-week low of $0.0013 during the previous session.
MLCG have been unable to prevent their stock from shedding more and more of its value for quite a while now. In fact the losses have been so devastating that compared to the high of over 18 cents posted just 7 months ago the company is sitting nearly 98% lower even after yesterday’s gains. The last reported financials are nothing to write home about either. At the end of June the company had:
• $23 thousand cash
• $45 thousand total assets
• $759 thousand total liabilities
• $4335 revenues
• $1 million net loss
It is obvious that MLCG is struggling. With a huge working capital deficit and negligible revenues the company is not among the most appealing medical marijuana pennystocks. The numerous outstanding convertible notes are another huge red flag. Just the one from April 1 has a principal amount of $600 thousand and features a conversion price at the lower of $0.0074 or the 40% of the average closing price 20 days prior to conversion. According to the OTCMarkets profile of the company as of October 15 the number of outstanding shares was around 84 million. Judging by the amount of shares traded yesterday though it is more than likely that quite a few shares have been printed since then.
Even though MLCG operates in the medical marijuana industry which guarantees them occasional spikes in interest from investors the company is simply riddled with red flags. Keep in mind that when on October 21 they announced the expansion of their sales operations to Europe the ticker actually closed the day 3% in the red. How long will then the current positive movement last?
