Tranzbyte Corp (OTCMKTS:ERBB) Drops Alongside Most Marijuana Pennystocks
After sitting on the verge of triple-zero territories for nearly a month Tranzbyte Crop (OTCMKTS:ERBB) started moving upwards only because of the general hype around the industry. With massive percentile movements and exploding trading volumes the stock was able to re-enter price ranges above 1 cent per share in just a couple of sessions.
Yesterday though it suffered a harsh correction when it slid down by 27% and closed at $0.0086. The amount of shares traded for the day was lower than the previous session but still the 466 million shares resulted in a dollar value of $4.6 million. ERBB was not the only marijuana stock that went through a pullback as most of the others also crashed.
Last Friday also brought wide-spread corrections due to profit taking from investors but the general enthusiasm held strong and this week the saw share prices surge at even greater rates. If the same will happen once again remains to be seen as the hype is bound to start losing steam at some point leaving the companies to fend for themselves. And ERBB will need a lot in order to remain at its current price.
The company had an eventful 2013 making a couple of acquisitions but its financial results have shown no notable improvements. In the most recent quarterly report for the period ending September 30 you can find the following numbers:
- $2600 cash
- $63 thousand current assets
- $4.6 million current liabilities
- $61 thousand revenues
- $289 thousand net loss
The massive negative working capital and the accumulated deficit of $17 million are not even the biggest concerns right now. No, that honor goes to the non-stop dilution that has been hitting investors in the last year and a half. At the end of June 2012 ERBB had 900 million outstanding common shares but as of November 19 2013 that number had turned into 3.4 billion. With a lot more convertible debt and just starting the payments for its acquisitions it is more than likely that the issuance of shares is going to continue at the same rate.
Their Automated Marijuana Vending Machine should have begun distribution in the third quarter of 2013 but now the management of the company expects them to arrive at some point this month. If they come up with a positive PR about their operations it might prolong the 
positive run of the stock. Still if you are determined to invest in the marijuana and cannabis sector it might be best to pick a company with a bit less red flags.
positive run of the stock. Still if you are determined to invest in the marijuana and cannabis sector it might be best to pick a company with a bit less red flags. 