Prior to the January 17 session the stock of Mentor Capital, Inc. (OTCMKTS:MNTR) was seeing only sporadic trading on extremely low volumes and was fluctuating around 22 cents per share. On that day though MNTR revealed the first legal cannabis company they decided to fund and their stock simply exploded – starting from an opening price of $025 it found itself at $1.9 at closing time, an increase of 759%. That was just the beginning and in a little more than two months MNTR almost touched on $9 per share.
Such prices were quite obviously unsustainable even for the massive hype around the marijuana industry and since then the stock has quickly wiped around 60% of its value. Last Friday it dropped by another 20% and closed the week at $3.7. Even after the significant corrections
MNTR remains at extremely inflated share prices that will be quite hard to support if you take into account the massive red flags hanging around the company.
The first company that was supposed to receive around $7 million was HempCon, Inc. but despite the rather optimistic language used in the PR just 11 days later the agreement was terminated. Investors knew about the outcome even earlier thanks to an email from HempCon which we covered in our previous articles.
On Febraury 19
MNTR bought a 51% stake in MicroCannaBiz, LLC, a company that was incorporated just this year with almost no information about it outside of the acquisition announcement. But the biggest move made by Mentor was the 60% acquisition of Bhang Chocolate Company, Inc. valued at $39 million. Well, when a company starts to talk about millions and millions of acquisitions and investments you wouldn’t expect its financials from February 28 to be:
- $594 thousand cash
- $1,9 million total current assets
- $9,2 million total current liabilities
- Zero revenues
- $48 thousand net loss
In the latest PR though the company says that there is nothing to worry about because they are going to collect around $100 million for all the marijuana initiatives through the exercise of 15 million Series D warrants. We have our doubts that any investors is willing to pay 7 dollars for a share that at the moment trades for less than $4.
Six months ago
MNTR was involved with biotech companies that were developing cure for cancer while back in 2002 it tried to acquire stakes in NYSE-listed energy companies. Reading this cease-and-desist order against Main Street AC, Inc. (the former name of Mentor Capital) reveals that the company was hoping to raise $150 million from the same 7 dollar warrants.
With no guarantees that this time things will be different it may be for the best to look for other less risky investment options. Be sure to do your own research and try to take into consideration all the associated risks before attemtping any trades involving pennystocks.
