FFFC did experience one or two red sessions which is to be expected from a volatile stock that has just emerged from the triple zero levels, but when the management team started announcing new agreements, the ticker really flew.
On February 4, they issued a press release which informed us about a deal between FFFC and Singlepoint Inc (OTCMKTS:SING). According to the contract, FFFC will provide SING's management team with various services related to the financing and management of the company and this, apparently, was a good enough reason for investors to start buying. Six and a half hours after the announcement of the deal, FFFC's shares were 50% more expensive while the dollar volume racked up in a single session was nearly $4 million.
The general hype around the marijuana industry meant that although FFFC fluctuated quite a bit over the next few days, it managed to avoid serious drops. On February 10, the management team came up with another press release and another contract which was bound to propel the ticker towards the sky. Apparently, they signed an agreement with a newly-formed entity called Colorado Cannabis Business Solutions Inc. Once again, FFFC are supposed to provide their partners with various services and it seemed at first that the market's reaction to the optimistic PR will be even more positive. The ticker opened the day at $0.0043 (a staggering 22% above its previous close), ran to an intraday high of $0.0049, but then plummeted towards lower levels. It closed the day in the green, but only just and a lot of investors were wondering why it's failing to perform as expected.
Since then, FFFC has registered four consecutive red sessions and the people who once believed that the company is in for a massive growth are now starting to get concerned. Even the latest PR which hit the wire around forty-five minutes before Friday's opening bell failed to result in any positive movement and FFFC finished the week with 14.8% in daily losses and a trade value of more than $1 million. People were hoping for a different performance but why did FFFC fail to deliver?
Once you do a bit of research, you'll see that the problems aren't really that complicated. The management team tried to explain on Friday that everything is going according to plan, but if you do some digging around, you'll see that this isn't strictly the case.
In fact, even after Friday's drop, FFFC's market cap exceeds $5.3 million and although this may not seem like much, it could be a bit of a stretch for a company that has just $2 thousand in the bank, around $10 million in current liabilities, and an accumulated deficit of $9.9 million. It's also a lot for an enterprise that doesn't seem to have a working website and one that dilutes its shareholders so badly.
Between November 15, 2013 (the publishing date of the latest 10-Q) and January 30, 2014 FFFC's management team issued a mind-boggling 1,667,955,583 shares of common stock. In case you're wondering, this amounts to around 22 million shares per day and that's pretty devastating for the people who have put their hard-earned money in this particular ticker.
They recently increased the company's authorized capital to 6 billion shares which means that we won't be surprised if we see some more stock coming off their printing press in the near future. Keeping that, as well as the rest of the red flags around FFFC in mind is absolutely essential before making any investment decisions.