Cannabusiness Group, Inc. (OTCMKTS:CBGI) Sinks Deeper
The negative momentum around the stock of Cannabusiness Group, Inc. (OTCMKTS:CBGI) is only getting stronger and yesterday the company slashed another 16% of its price dropping to just 6 cents per share. Compared to the hype-induced heights of more than 40 cents reached a month ago CBGI has now lost 85% of its value. The last drop happened on 9.1 million shares, the biggest volume posted by the company for the past 19 sessions.
With the rampant hype around the marijuana industry now largely gone many of the companies that were brought to unrealistic valuations are now suffering harsh corrections and CBGI is no different. The last time they were able to finish a session with a sizable gain was last Monday when the stock closed 12% up at $0.011. Well, even that brief spark of optimism was only possible because of a round of email touts sent by paid pumpers.
Stock Hideout, 007 Stock Chat and PennySt0ckSpy took part in the last wave of the promotion and reading the disclaimers at the bottom of the emails reveals some quite interesting facts. Apparently Stock Hideout received a compensation of $10 000 from 007 Stock Chat, while they in turn were compensated by $25 000 from Casey Cummings. This may be nothing more than pure coincidence but the CEO of CBGI is named Michael Cummings.
Despite the depressing performance of their stock the company has actually been able to move forward with their new business plan. Through the acquisition of the Nor Cal Connection CBGI have been able to generate some revenues but for now the numbers are far from inspiring. According to the quarterly report for the period ending March 31 they had :
- $4972 cash
- $5387 total assets
- $16 thousand total current liabilities
- $30 thousand revenues
- $4456 net income
Investors should also keep in mind that between February 13 and March 26 CBGI issued 45 million shares due to debt conversion at prices ranging between $0.0001 and $0.00285. Even at the current deflated prices the owners of these shares could reap substantial profits and the possibility of more dirt-cheap shares being issued should not be ignored.
On April 8 CBGI acquired another company – National Security Solutions, Inc. This new subsidiary is also geared towards the marijuana industry through its dispensary security plan. Still we won’t know how profitable its operations are for quite a while.
For now the best course of action is to take into account all the red flags around the stock and plan your investments accordingly.
Most of the other marijuana pennystocks also suffered corrections during yesterday’s trading. Tranzbyte Corp. (OTCMKTS:ERBB) lost nearly 10% of their stock price and slid down to $0.05 while GreenGro Technologies, Inc. (OTCMKTS:GRNH) closed at $0.34 per share, representing a loss of 6.85%.