MassRoots Inc (OTCMKTS:MSRT) Moves Higher
The stock of MassRoots Inc (OTCMKTS:MSRT) finished last Friday’s trading over 16.6% in the green at $1.69 per share. Most of the gains were registered less than an hour before the end of the session. The daily volume of 280 thousand shares is the biggest seen by the company since March.
At the end of August MSRT announced that they had filed an application to become a NASDAQ listed company. The fact that MassRoots is a cannabis technology company helped them gain increased exposure in the media and the hype around the stock is still strong. Getting too excited may be dangerous though. Currently MSRT doesn’t meet the minimum requirements of the NASDAQ exchange and even if they eventually do there is absolutely no guarantee that the application will be approved.
Not to mention that meeting the requirements in the first place may prove to be extremely difficult. The financial state of the company is that of a typical pennystock with the latest quarterly report containing the following numbers:
• $171 thousand cash
• $1.1 million total current assets
• $481 thousand total current liabilities
• $2126 revenue
• $1.51 million net loss
The social media platform is continuing to gain traction reaching half a million users according ot the August 26 announcement. MSRT also stated that in 10 days of aggressively monetizing their digital properties they have generated $25 thousand in revenue. These may be important milestones for the company but they do not make the red flags any less dangerous.
MSRT has been funding its operations through numerous offerings of shares. Last year 3 million shares were sold at just $0.10 while in the first half of 2015 millions of shares saw the light of days at prices ranging from $0.50 to $0.75. Another 936,341 shares were issued thanks to warrants with an exercise price of $0.001. The company still needs to raise more capital and on September 3 a new S-1 Registration statement was filed. According to it MSRT plan to sell 4 million shares and 4 million warrants.
The PR about the NASDAQ application certainly pushed MSRT up the chart but it alone cannot justify the current valuations commanded by the company. At the moment the market cap has almost reached $75 million, sum that is completely disconnected from the underlying fundamentals. That is why it is paramount to do your own due diligence before putting any money on the line.
