Hemp Inc (OTCMKTS:HEMP) Takes A Step Back
On Tuesday Hemp Inc (OTCMKTS:HEMP) announced its first product from the company’s decortication facility in Spring Hope, North Carolina. According to the PR 25 thousand of SpillSuck, an environmentally friendly absorbent, are in the final stages of packaging, after which they will be ready for sale. The reaction to the press release was ecstatic – investors rushed towards the stock of the company and as a result of the intense buying HEMP surged by nearly 31% to a close at $0.052 per share.
Yesterday, however, instead of flying even higher up the chart the ticker suffered a drastic change in direction and sunk down to a close 6.15% in the red at $0.0488. The correction may seem surprising at first but taking a second look at the PR is enough to explain everything.
The decortication facility if still far from being operational and this means that the current amount of product is limited – HEMP expect to have another 100 thousand pounds in 2-3 weeks but after that they estimate getting only 50 thousand pounds ready for market. Furthermore, for now the company hasn’t actually announced any orders for the product stating only that currently they are in talks with retail suppliers.
In the past couple of months HEMP have not given any deadline estimates for the completion of the decortication plant. The last time they did so was back in January when they expected for the decortication line to become fully operational by the second quarter of the year.
The list of red flags surrounding HEMP goes on – the underwhelming financials from the annual report for 2015, the continued dilution of the common stock, and the millions upon millions of outstanding preferred shares that can still be converted into common shares. Before you put any money into HEMP‘s stock you should take the necessary time to do thorough due diligence. Don’t underestimate the risks and set appropriate time horizons for your trades.