Will Hemp Inc (OTCMKTS:HEMP) Recover?
Last Wednesday Hemp Inc (OTCMKTS:HEMP) simply got crushed with their stock crashing by 40% on a staggering daily volume of nearly 100 million shares. The reason for the massive sell-off were the charges that the Securities and Exchange Commission filed against HEMP and its CEO. According to the official complaint Mr. Bruce Perlowin, his friend, Barry Epling, his brother, Jed Perlowin, and certain private companies had engaged in a long-running scheme to evade the registration provisions in connection with millions upon millions of shares issued by HEMP.
After seeing this the hit that the stock took shouldn’t be that surprising. Despite the serious allegations, however, on the very next day the panic selling not only had subsided but the ticker actually managed to move up by over 4%. On Friday the market showed even greater support and pushed HEMP to a close 24% in the green at $0.031 per share.
It seems that quite a lot of investors weren’t that worried by the fact that, in just one example from the complaint, 140 million HEMP shares had been transferred as gifts “in recognition of affection and appreciation for over 20 years of friendship and loyal assistance.”
Paying for its legal defense will put even greater strain on the already limited financials of the company. As of March 31, 2016, HEMP had:
• $160 thousand cash
• $1.5 million total current assets
• $190 thousand total current liabilities
• $743 thousand sales
• $3 million net loss
The lack of any meaningful updates on the current progress of the assembly of HEMP‘s decortication facility in Spring Hope, North Carolina, doesn’t appear to be bothering investors, either. The last time the company mentioned a deadline for the completion of the plant was back in January when they were hoping to get everything operational by the second quarter of the year. Well, as it turned out this was just another of the extremely optimistic dates given by HEMP.
In early trading today the stock of the company is continuing to be rather volatile, currently trading 4.8% in the green at $0.0325.