Cannabis Science Inc (OTCMKTS:CBIS) Spikes Up The Chart
After closing below $0.03 on Thursday and Friday the stock of Cannabis Science Inc (OTCMKTS:CBIS) began this week on a much more positive note. Yesterday the ticker added close to 9% to its value and climbed to a close at $0.032. The traded volume of 13 million shares is among the biggest registered by the company since the start of the year. What could explain the sudden change in direction though?
Well, yesterday OmniCanna Health Solutions, Inc. (OTCMKTS:ENDO) announced that it will release a new skin care product line called the Hempery on May 20. This is the first PR published by the company in nearly a year but it barely had any effect on the movement of their stock – yesterday ENDO traded less than 500 thousand shares which brought the dollar value for the session to $6530. CBIS may have a vested interest in the success of ENDO but it is highly unlikely that the PR the caused the spike in share price.
A far more likely explanation is that CBIS moved upwards pushed by the general hype in the medical marijuana and cannabis industry that was generated by the PR published by Medical Marijuana , Inc (OTCMKTS:MJNA). Yesterday they announced that the Brazilian government has approved one of their products for import and that it can be used as a prescription for approved medical indications.
The excitement created by the news was so strong that investors overlooked the fact that CBIS yesterday submitted a notification of late filing. The company was supposed to file its financial report for the first quarter of 2015 by May 15 but they were unable to do so. Thanks to the notification now CBIS has 5 more days to complete the quarterly.
If the annual report for 2014 is anything to go by investors should be extremely careful when setting the time horizons for their trades. At the end of December, last year, the financial state of CBIS was nothing short of atrocious:
• $10 thousand cash
• $166 thousand total current assets
• $3.95 million total liabilities
• $1031 revenues
• $16.8 million net loss
If the quarterly report shows a similarly depressing picture the ticker could quickly reverse its direction and slump further down the chart.
Even after yesterday’s gains CBIS is still sitting precariously close to its 52-week low of $0.028 that was registered just days ago. Since the start of 2015 the company has obliterated over 60% of its value but when compared to its high of $0.30 posted in early 2014 CBIS is down by close to 90%.
If you are determined to trade the stock take into account the numerous red flags that surround it – the millions of shares issued to directors of the company through stock compensation plans, the insider selling of shares, the ballooning count of the outstanding shares. Use caution and never put unaffordable sums of money on the line.
