MassRoots Inc (OTCMKTS:MSRT) Isn’t as Hot as it Used to be

A couple of months ago, investors were in love with MassRoots Inc (OTCMKTS:MSRT). The company had just announced the filing of all the necessary documents for up-listing the stock to NASDAQ, it had received quite a lot of coverage from serious media outlets, and as a result, the stock was enjoying a lot of attention.

Things are a bit different right now. MSRT has dropped from over $2 per share back in September to it’s current value of $1.33. Perhaps more worryingly, we are starting to see double-digit crashes more and more often. Yesterday, for example, in a matter of just six and a half hours, the stock managed to incinerate nearly 15%.

At a little over $170 thousand, the dollar volume was above average, but not really impressive enough to put MSRT among the hottest OTC tickers out there. Clearly investors are nowhere near as excited as they used to be and we’ll now look into some of the reasons for this.

First of all, the hype around the whole up-listing thing seems to have died down a bit which, it must be said, isn’t really too much of a surprise. The fact of the matter is that while the documents might have been filed, for the time being at least, MSRT is still a long way away from meeting the strict regulations of the national exchange.

The enthusiasm around the up-listing has given way to worry around the way MSRT value their stock. They filed a registration statement a few weeks ago and they let us know that they are about to conduct a private offering, the pricing of which was not revealed initially. It wasn’t until Monday that MSRT said that shares will be sold at $1.25 per share, and the fact that more than $1 million worth of stock was purchased in an extremely short period of time shows that the people taking part in the offering are quite happy with the price. The same can not be said about retail investors, however.

But is there anything that could lift their mood a little bit?

Well, the Q3 report which is supposed to come out next Monday might just be able to turn the tables around. All the talks about a NASDAQ up-listing and all the media coverage hasn’t really changed the fact that the latest 10-Q is absolutely atrocious and if MSRT want to be taken seriously, they’ll need to show some more solid results for the third quarter.

If they don’t, even the people who bought $1 million worth of stock at $1.25 per share could find themselves willing to liquidate their positions. And they might not be the only ones.

Last year, MSRT sold around 2 million shares at a price of just $0.10 apiece and although the company upped the prices of its subsequent offerings, they are still way below the current market value. In addition to this, quite a few purchase warrants were issued over the last two years. Their exercise prices are low as well and the warrant holders are already taking advantage of this. In April, they exercised 750,000 warrants at $0.40 apiece.

As if that wasn’t enough, there is also a convertible debenture to worry about. The outstanding principal amount at the end of Q2 was a little over $209 thousand and the conversion rate is fixed at $0.10 per share.