Plandai Biotechnology Inc (OTCMKTS:PLPL) Breaks Through the $1.50 Mark With Ease
It’s been an eventful month for the so-called pot stocks on the OTC Markets. The State of Colorado officially legalized the sale of recreational marijuana on January 1 and this act triggered an absolute frenzy. Four weeks of colossal volumes, impressive surges and painful drops turned the cannabis industry into the hottest sector in Pennyland. As you probably know, Plandai Biotechnology Inc (OTCMKTS:PLPL) want to be a part of it.
Like virtually all pot stocks, PLPL had its ups and downs throughout the first sessions of the new year. On January 16, however, they announced a partnership with a company called Diego Pellicer, Inc which gave the ticker a massive push.
Despite a few minor corrections, PLPL managed to surge from $0.55 all the way to $1.52 in no more than two weeks. The huge volumes and posts on message boards and social media platforms suggest that there are lots of people hoping to see PLPL run further up. But will it?
Only time will tell, but right now, we can see a few potential hitches.
For one, the large-scale pump that we’ve been talking about for so long is still going strong. We received the latest batch of emails from Wall Street Buzz and Information Solutions LLC shortly before yesterday’s opening bell and the stream of overly optimistic articles from Goldman Small Cap Research and Stock Market Media Group is virtually never-ending.
Then there’s the question of PLPL‘s new partners. As the pumpers are only too happy to inform you, one of Diego Pellicer’s co-founders, Jamen Shively, once held a managing position at Microsoft Corporation (NASDAQ:MSFT), which has inevitably helped with the hype and excitement. When he entered the cannabis business, he set himself the task of forming what he likes to call “the Starbucks of Marijuana” – a chain of retail stores selling weed.
Unfortunately, since Diego Pellicer is a privately held company, we’ve no way of knowing if he has succeeded or not. Their website doesn’t even have a Contact Us page and according to Bloomberg, their corporate headquarters is located in a UPS store.
We read some interviews with Mr. Shively and we can see that he makes some bold claims about the future of his business and the marijuana industry in general. Some people, however, aren’t too sure about his projections. The other co-founder of Diego Pellicer is called Douglas Anderson and according to this article, he has had a few brushes with the law in the past.
These things, however, are not necessarily going to stop PLPL from succeeding. What can put a spanner in the works is the fact that they’re still not ready with the revolutionary extracts. As we mentioned numerous times in our previous articles, the company has so far generated revenues through the sale of timber and agricultural products and it’s clear from the financial statements that the results are less than impressive. According to the latest filings, they expect to have the Phytofare products on the market in early 2014, but they have missed so many deadlines so far, that basing your investment decision on their projections is becoming increasingly difficult.
PLPL is currently running solely because of the hype and excitement coming from the press releases, promotional articles and emails. Eventually, the enthusiasm will die down and with little else to support the stock, a drop seems inevitable. That’s why carefully considering all the risks and doing a lot of due diligence is absolutely essential.
Yesterday’s session was quite positive for two other penny stocks as well. Suburban Minerals Corp (OTCMKTS:SUBB) and Imogo Mobile Technologies Corp (OTCMKTS:IMTC) both jumped up and registered daily gains of around 24% each. You should bear in mind, however, that, like PLPL, these two tickers are fueled by paid pumps which means that the threat of sudden and violent corrections is very real.
