Primco Management, Inc. (OTCMKTS:PMCM) Crashes by a Quarter

35PMCMchart.pngIt appears that the stock of Primco Management, Inc. (OTCMKTS:PMCM) is one of the few pennystocks that were unable form a prolonged positive run up the chart even after announcing a switch to the marijuana industry. It is true that the hype around the green plant helped PMCM log in a couple of explosive sessions but by now most of the gains have been wiped. 

Yesterday the stock slashed more than a quarter of its value and closed the day at $0.0019. As a whole PMCM have dropped by close to 60% from the recent high of $0.0047. So, what makes the stock so risky that even the marijuana enthusiasts are reluctant to put their money on the line? Well, as you will find out soon enough there certainly isn’t a shortage of reasons.

Let’s start with PMCM‘s fundamentals. According to the last financial report they filed at the end of September 30, 2013 they had:

• $115 thousand cash
• $3.1 million current assets
• $3.5 million current liabilities
• $29 thousand revenues
• $1.6 million net loss

We should clarify that around $2.6 million of the assets consist of music related rights that in turn were able to generate less than $30 thousand in revenues. 

Now comes the massive, and we mean really massive, dilution that shareholders had to suffer through. On November 18 the reported number of outstanding shares was around 1 billion. After just three months there were 4.8 billion shares out of the 5 billion authorized and that is certainly not the end of the dilution. Initially the management of the company planned to increase the authorized shares to 25 billion according to the form 14c they filed on February 18. Just two days later they changed their mind and settled on an increase of 15 billion authorized shares. For investors there was little difference and the stock continued to fall. 

And now we come to the really fun part. This Monday PMCM announced a new joint venture with CanMed Ventures in order to build 30 000 square foot marijuana cultivation facility. That should be an extremely positive development for the company, right? Well we have our doubts. 

There is no information about the entity CanMed Ventures nowhere on the web. Even their official site offers little useful insight. Still, a lot can be learned if you do a whois check on the site. Apparently it was created one day after the announcement of the deal went public by the same people who stand behind Primco’s own website. 

7PHOTchart.pngThanks to the numerous red flags around the company any trading with their stock should be preceded by serious due diligence. Be careful and plan your investments accordingly in order to avoid any unnecessary losses. 

Yesterday the leaders of the marijuana industry – Growlife, Inc. (OTCBB:PHOT) and Medical Marijuana, Inc. (OTCMKTS:MJNA) recovered after going through a series of corrections. PHOT rose by more than 13.7% and closed just short of 40 cents per share while MJNA gained 8% to end the day at $0.319.

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