Anastas Gegov

Medical Marijuana Inc (OTCMKTS:MJNA) Begins Correcting

by Anastas Gegov May 11, 2016

After a long time of struggling to finds its direction we saw Medical Marijuana Inc (OTCMKTS:MJNA, MJNA message board) embark on a rapid ascent in the beginning of this month. The company nearly doubled its value over the course of just a couple of sessions and we saw an impressive increase in daily volumes.

 

This was rather strange, as the company already had quite a big market cap and it didn’t really have what it takes to back it up. In other words, MJNA’s value is quite inflated. Meanwhile, the contents of its financial report for the fiscal 2015 looked something like this.

 

  • cash: $240 thousand
  • current assets: $13.51 million
  • current liabilities: $4.72 million
  • revenues: $9.21 million
  • net ordinary loss: $3.64 million

 

Those certainly don’t look like the numbers you would expect to see in the balance sheet of a company valued at more than $100 million. Still, it seems that the company’s overly-inflated valuations of its assets might have also played a role in the high market cap that MJNA has.

 

This is why it was rather strange that MJNA managed to make such an impressive upward run. It was, however, certain that it was going to come to an end sooner rather than later and we saw the ticker drop 11.41% yesterday, closing at $0.052. A total of 12.99 million shares changed their owners and generated $682 thousand in daily dollar volume.

 

It seems like MJNA will close today’s session in the red as well. In any case, do your due diligence and weigh out the risks before putting any money on the line.

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