Penny Stock Crowd Fail Miserably with X-Change Corp (OTCMKTS:XCHC)
We know that there are quite a lot of investors who are ready to take some risks every now and then and we are aware that sometimes those risks could pay off big time, but we are still quite convinced that there is a line that should not be crossed and in the case of X-Change Corp (OTCMKTS:XCHC) we reckon that Penny Stock Crowd (PSC) did just that.
It was the next in a long line of pumps for XCHC and this time, newsletter activity was relatively modest – the compensation was $5 thousand and the only emails that we managed to intercept were the ones from PSC. Still, XCHC themselves tried to help and they issued a press release according to which they have hired an expert who will help them with the European operations. Which sounds a bit weird.
The latest report that XCHC filed was the annual one for 2012 and according to it, the company has no operations and it even states that they don’t need office space since there are no employees. That begs the question: “If there is no one working for XCHC, how are they going to convince investors that the ticker is a viable investment alternative?”.
Well, they are desperately trying to hype the stock with news about the development around their cosmeceutical marijuana-based products and according to one of the more recent press releases, XCHC are all but ready to start selling the beautifying concoctions in Europe. They say that there is a manufacturing facility and that the sales are expected to start before the end of May. That’s even weirder.
We looked through the latest financial statement and having in mind what we found in it, we’re struggling to believe that XCHC have managed to hire or build a plant where the cosmeceuticals will be produced. Here are the figures:
- total assets: $359
- total liabilities: $1.4 million
- no revenue since inception
- yearly net loss: $3.3 million
Not exactly a pretty picture, is it? And we have yet to be convinced that XCHC will become as rich as they claim through the medical marijuana business. Why? Because XCHC have been dealing with all sorts of businesses in the past and, as you can see from the figures above, they have failed spectacularly at each and every one of them. Now, with just five months in the medical weed sector, they are trying to convince us that they will finally succeed? We’re not so sure.
Some might argue that the people who run XCHC have decades of experience in this particular industry, but let’s remember where they come from. XCHC‘s current CEO, Mr. Robert Kane is also at the helm of a business venture called Cannabis Consulting, LLC which is a wholly-owned subsidiary of Cannabis Science Inc (OTCMKTS:CBIS) – a company that has no cash in the bank whatsoever, a big working capital deficit, dismal revenues and colossal net losses. Just like XCHC, CBIS also love to give their share price a boost every now and then by issuing some exciting news and we should point out that some of the two companies’ press releases sound suspiciously similar. The excitement, however, is always quite short-lived and soon after the announcements stop, the ticker crashes hard. Paid pumps can also be seen in CBIS‘ past, but that’s where XCHC truly exceed.
There were a couple of campaigns in December last year, in January and in February. It’s pretty clear where they all led, and the fact remains that although Penny Stock Crowd promised a big bounce yesterday, the ticker continued to slide towards the bottom of the chart, losing as much as 27% in just eight hours of trading. That’s why you should always be extremely careful when considering promoted penny stocks as a trading option.
