Plandai Biotechnology Inc (OTCMKTS:PLPL) Sinks Deeper
A couple of months ago, Plandai Biotechnology Inc (OTCMKTS:PLPL) was hovering well above the $1 per share mark. There were plenty of promotional emails and PR articles portraying the company as the next big thing in the marijuana industry, people were excited, and volumes were colossal.
Right now, there’s still plenty of optimism coming from various sources (mainly emails and pump articles). Trading is not quite as intense, but it is still substantial and, judging by the performance of other pot stocks, the cannabis hype is still strong. PLPL, however, is now sitting at just $0.78 per share and message boards show that investors are no longer convinced. So, what went wrong?
The figures in the latest 10-Q are not exactly helping the ticker regain traders’ trust. The report covers the three months ended December 31, it was published on February 19, and it boasts the following financials:
- cash: $131 thousand
- current assets: $142 thousand
- current liabilities: $2.6 million
- quarterly revenues: $13 thousand
- quarterly net loss: $3.3 million
The results look bad enough on their own, but when you compare them to the ones from previous periods, things look even more bleak. There’s been a whopping 88% drop in revenues year-over-year while the net loss has increased by an eye-popping 650%. At the same time, the cash reserves are shrinking and the debt is piling up.
On a brighter note, we should mention that fifteen minutes before yesterday’s opening bell, PLPL announced that they have qualified for a grant from the South African Department of Trade & Industry. This basically means that they should receive a cash injection of between $1.3 and $2.5 million in the coming months.
In light of the figures above, this is certainly a positive piece of news, but even it wasn’t able to break the ticker’s fall. It seems that investors simply aren’t ready to trust PLPL anymore. And we can’t say that we blame them.
As you probably know, promoters of all shapes and sizes have been desperately trying to convince investors that PLPL is a worthy place for your money by saying that the Phytofare products will bring in quite a lot of money.
What they have failed to mention, however, is the fact that the Phytofare extracts are not ready for the market. As you can see from the 10-Q covering the period ended September 2012, PLPL expected to start selling them in 2013, but the latest report shows that this didn’t happen.
Broken promises and paid promotions has proven to be a bad combination for countless penny stocks. That’s why, careful consideration of all the risks before putting any money on the line is absolutely essential.
Quasar Aerospaces (OTCMKTS:QASP) is another OTC-listed ticker that slipped and fell during yesterday’s session. It managed to rack up a dollar volume of around $820 thousand while losing 12% of its value. AV1 Group, Inc (OTCMKTS:AVOP), on the other hand, went through the roof after announcing its entrance into the marijuana industry. The ticker gained 600% while the dollar volume at the end of the day stood at $1.26 million.
