Will MassRoots Inc (OTCMKTS:MSRT) Keep Its Gains?
On August 31 Mass Roots Inc (OTCMKTS:MSRT) announced that they had filed an application for an uplisting to the NASDAQ national exchange. For a pennystock such a move is bound to capture the attention of the market but MSRT had the added advantage of operating a social network for cannabis consumers giving them an even broader media exposure. And indeed, the PR had a tremendous effect – for seven sessions in a row the stock surged upwards moving from an opening price of $1.17 on August 31 to a close at 2.04 on September 8.
For now the hype is still strong but there are some concerning signs. For most of yesterday’s trading the stock of the company was sitting above 2 dollars even spiking to $2.13 but right before the closing bell it plunged downwards finishing the session with a loss of 8.4% at $1.85. The daily volumes have also dwindled significantly and from over a million traded shares on Tuesday yesterday investors exchanged a little over 181 thousand.
So is MSRT actually a company worthy of being listed on the NASDAQ? Well, the answer should become rather obvious after just one glance at the latest financial report. As of June 30 MassRoots had:
• $171 thousand cash
• $1.1 million total current assets
• $481 thousand total current liabilities
• $2126 revenue
• $1.51 million net loss
In addition to the underwhelming numbers found on the balance sheet investors have to also worry about the millions of shares issued through private offerings at prices many times lower than the current market price of the stock. For example last year over 3 million shares were sold at $0.10 each while another 4.1 million shares have been sold at prices ranging from $0.50 to $0.75. Let’s not forget about the close to a million shares that were issued through the exercise of warrants at $0.001.
It is true that the user base of MSRT‘s platform is still growing and recently it surpassed 500 thousand users. The company also managed to generate $25 thousand in 10 days as a result of “aggressively monetizing its digital properties”. Is this enough to justify the current market cap of the company of over $82 million though? It is up to you to decide.
