Now though, the stock has regained a substantial part of its value and you're probably wondering if it is capable of putting on a more consistent performance. The future should give you a definitive answer, but while you're waiting for it, you might want to consider one or two things.
For one, although the press release from Thursday sounds optimistic, it doesn't actually mean that AFAI are about to start selling medical marijuana immediately. They have to file some documents with the regulatory organs and if everything goes according to plan, they will be allowed to legally open a dispensary. The next logical question is: "Do they have the money to do it?".
Unfortunately, the shareholders have no way of knowing. AFAI failed to publish their 2013 report on time, but they did say that it should be available by tomorrow. One thing is for sure - if the figures don't represent a massive improvement on the ones seen in the Q3 statement (on September 30, AFAI had just $166 in current assets), the stock could be in for another drop.
One more thing that you should probably bear in mind while making your decision is the fact that AFAI was the target of a rather big promotional campaign. We wrote about the pump a couple of months ago and we mentioned that the budget hovers around $150 thousand. The most active outfit back then was Wall Street Profit Search (WSPS) who were even promising to distribute their reports through the snail mail. Currently, WSPS aren't particularly active on the touting front, but their disclaimer does say that they own plenty of common shares, options, and convertible preferred stock. Will they hang on to their holdings and hope for the company's success? Or will they decide to cash in while the price is sitting comfortably above the $0.20 per share mark? We're about to find out.
As you can see, there are plenty of things that might be overlooked by the more inexperienced investors. Even so, many of you will probably point out that a potential dispensary held by AFAI will cement their legitimacy which will, in turn, help the stock weather the difficulties.
That might just happen, but let's not forget that plenty of people thought that Growlife Inc (OTCBB:PHOT) is the most solid company in the cannabis business. Apparently, the regulatory organs aren't so sure.
PHOT became the fifth suspended pot stock (after Citadel EFT Inc (OTCMKTS:CDFT), Aventura Equities (OTCMKTS:AVNE), Petrotech Oil & Gas Inc (OTCMKTS:PTOG), and Advanced Cannabis Solutions Inc. (OTCMKTS:CANN)) which means that no one is safe at the moment. Treading carefully and doing a lot of due diligence is absolutely essential.