Will Hemp Inc ( OTCMKTS:HEMP) Fall Below 1 Cent?
Last Thursday the stock of Hemp Inc (OTCMKTS:HEMP) closed less than a percent in the green and even that result was only possible thanks to sudden spike upwards that took place right before the closing bell. The performance was far from convincing with the stock registering a low of the day of $0.0108. Just a couple of session before that HEMP posted a new 52-week low of exactly $0.01.
If the depressing performance of the ticker continues a plunge into the double-zero price ranges is definitely not out of the question. Not to mention that HEMP has been unable to get investors excited for quite a while. A new PR published several hours ago will attempt to keep the stock going in the right direction. The press release contained little more than fluff though – HEMP talked about North Carolina’s CBD/Hemp Oil bill that passed the Senate with a unanimous vote (47-0) and that, according to HEMP, puts the state of North Carolina one step closer to hemp legalization.
Getting hemp legalized in North Caroline is of extreme importance to the company because their decortication facility is located in the state. For now Hemp’s Temafa decortication line will be used solely to process kenaf. Well, when the machinery actually gets operational, that is. After several delays at the end of May a German engineer finally arrived at HEMP’s facility and the reassembly of the line could get underway. Since then, however, no updates about their progress have been published.
With a multitude of red flags the depressing performance of the stock, HEMP has lost over 75% of its value compared to the high of $0.05 from late-January, shouldn’t come as a surprise. The company finished the first quarter of the year with $6223 in revenues and a gross loss of $23 thousand. The company also owes its CEO Mr. Bruce Perlowin over $2 million and if HEMP follows its previous pattern that amount will be slowly reduced through the issuance of preferred K shares.
Each preferred K share can be converted into 10 commons shares and Mr. Perlowin has been doing exactly that for quite some time. According to the latest quarterly report there were over 150 million preferred K shares still outstanding. In our articles we have been warning you about the massive dilution of HEMP’s common stock on numerous occasion. We even warned you that an increase of the authorized amount is highly likely. And we were right – the company increased its authorized shares from 3 billion to 5.5 billion. With 2.7 billion outstanding shares HEMP, despite the devastating loss in share price, still commands an inflated market cap of over $32 million.
Doing your own research before putting any money on the line is absolutely paramount. Take the numerous extremely serious red flags into account and adjust your trades accordingly.