Growlife Inc (OTCBB:PHOT) Enters Another Exciting Week
The last couple of weeks have been quite exciting for Growlife Inc (OTCBB:PHOT)’s shareholders. A total of five press releases have come out of the company HQ and they, along with an interview published on Seeking Alpha have made for quite an erratic stock performance.
First, PHOT announced that their name has been featured in a popular medical marijuana publication. Then, the company CEO, Sterling Scott wrote a letter to the shareholders telling everyone about the bright future. A couple of days later, the bright future was already a fact (if the press release is to be believed, that is) when another announcement about record-breaking revenues came out. As if that wasn’t quite enough publicity, a new retail store was announced on September 16.
The exciting news resulted in six consecutive green sessions and total price gains of around 57%. PHOT was trading at around $0.055 back then but unfortunately, the pressure at this sort of heights proved to be too much. There was no new announcements on September 17 and the ticker started retracing its steps almost immediately. Then, on September 18, the Seeking Alpha interview went online and it did result in a modest gain, but as soon as the excitement of the questions and answers session died out a bit, the ticker was back on the downward slope. PHOT finished last week at $0.044 which is exactly 20% below the height reached just four sessions before that.
The performance, you would agree, is anything but consistent and today could also be quite a roller coaster. An hour and a half before the opening bell, a new announcement hit the wire informing us that a website under the domain name cannabis.org will be launched on October 1. PHOT want to turn the portal into a premier web destination for marijuana lovers and they seem to be convinced that this will happen in a timely manner. Once again, we’ll need to wait and see if their claims have any merit but, in the meantime, the stock performance remains as unpredictable as ever. Right now, just an hour into the session, PHOT has shifted more than a million shares and has moved both up and down. Where it will be when the closing bell rings is still anyone’s guess and the same exact thing can be said about the long term performance.
It’s pretty clear that the ticker is affected by all the news and the occasional interviews (like last week’s Seeking Alpha piece) that, willingly or not, boost the interest around the stock, but there are still many question marks and the only way we can get answers to them is the next financial statement.
One of the main unknowns around the upcoming 10-Q is related to profitability. Mr. Scott told us in during the Seeking Alpha article that he expects to have revenues in excess of $5 million by year end. That’s a massive improvement over 2012’s results ($1.45 million) but, then again, there are things to suggest that it might be possible. Quite a lot of acquisitions were completed during the last couple of months and the additional income should be reflected not only in the 10-K covering the fiscal 2013, but also in the quarterly report for the period that ends on September 30.
Unfortunately, the increase in revenues can not guarantee that the costs will be offset which could result in some more losses both in terms of money and in terms of investors’ confidence and as we all know, it all boils down to these things. If PHOT are able to persuade us that everything is going according to plan and that the expenses are dealt with in an appropriate manner, shareholders should be happy, if that doesn’t happen, however, the ticker will probably take the brunt of the impact.
Unfortunately, the people who have their money invested in the stock will need to wait for quite a while until the next financial statement and in the meantime, all they can do is watch the nail-biting roller coaster ride that PHOT has turned into.
Speaking of which, Media Analytics Corp (OTCBB:MEDA) might be starting to feel the effects of the expensive pump initiated for them. As we wrote earlier, the $3.8 million promotion resulted in four green sessions in a row. Today, however, just about an hour after the opening bell, it stands around 21% below Friday’s close.