United Cannabis Corp. f/k/a MySkin Inc (OTCBB:CNAB) Going Up Again
Yesterday, United Cannabis Corp. f/k/a MySkin Inc (OTCBB:CNAB) registered its sixth consecutive green trading day. During those sessions, it managed to run from less than $0.44 per share all the way to just under $0.90. In other words, it more than doubled its value in a matter of just over a week. What’s more, it racked up a dollar volume of almost $500 thousand yesterday which means that many people are now wondering if the ticker can hold its own at these levels.
If you are one of them, you should probably take a look at the historical performance. Once you do, you’ll see that CNAB is not exactly the most consistent stock on the OTC Markets. During Q1 of last year, the company announced that it (like many of its penny stock counterparts) is changing its business plan and that it is about to try and make a name for itself in the marijuana industry. The stock shot up thanks to the copious amounts of hype around the pot sector and on March 20, 2014 it managed to reach a mind-bending $14 per share.
Then, it ran out of breath and it started shrinking. In June, it slipped in the sub-dollar levels and although it has experienced a few more swings since then, running in the right direction for a longer period of time has so far proven elusive. Could the current hike be any different?
Nobody can say for sure. Things are not looking good, though.
For one, the run doesn’t seem to be caused by anything substantial. The latest press release, for example, came out almost two months ago and back then, it didn’t really have that much of an effect on the stock. And while the start of the current peak did coincide with the publishing of the 2014 10-K, the report doesn’t really suggest that you should be breaking the piggy bank.
Here’s what CNAB had at the end of last year:
- cash: $321 thousand
- current assets: $549 thousand
- current liabilities: $1.8 million
- yearly revenues: $186 thousand
- yearly net loss: $2.4 million
The balance sheet, with its $1.3 million in working capital deficit, is absolutely atrocious, and while some people may say that, at least by the low OTC pot stock standards, the sales are going well, they mustn’t forget that there’s a hitch. The 10-K tells us that $150 thousand (or about 80%) of the 2014 revenues come from deferred consulting revenues. In other words, in a matter of twelve months, CNAB managed to log less than $40 thousand in sales of products. Not really the solid results everyone was hoping for when the stock was playing with the $14 per share mark.
By the looks of things, CNAB‘s current run towards the $1 per share barrier is highly speculative. Make sure you bear this in mind and act accordingly.
