I wrote the company management ask them to defend the share price against abusive shorts. Also. I don't think think the shares outstanding is a big issue. Most of them are controlled insiders or affiliates or debt holders. It appears that the company has convertibles on its books associated with its debt holders. Most companies will show more outstanding shares with these debt instruments but these shares are normally restricted and cannot be issued unless the debt is paid off or converted into stock. In any case, this is just a debt to equity conversion. The exchange only offsets each other in the capital mix. Looking at it, I think the company would do better to paid down this debt first before implementing a stock buyback program.
One investor already converted from debt to equity, this is why outstanding amount went up. Bondholders normally do this when they perceive the equity picture and business metrics in a better light. In other words, they believe the stock will increase long term for a much better return than safer convertible bonds. This stock really should be trading higher. Maybe the MJ index people are trying to get their attention over their. The company needs to defend itself against the short seller who keeps killing the stock and momentum.
I see the company management acknowledged the undervaluation problem last year while considering a stock buyback program but they have not announced it or a plan to defend shareholder value against abusive short selling to drive down stock price as of yet.
You really confirmed a study on this issue. They authors found that there was not a big difference in gains between a timing strategy compared to buy and hold strategy. The timing strategy had a slight disadvantage in higher cost (commissions). Added to this, taxes on short term gains could be a major downside. Timing strategies also depended on the skill set and knowledge levels of the traders. With high frequency trading associated with firms trying to front-run small investor orders, it may be better for them to use a buy and hold strategy with the dollar averaging method to gain their positions in stocks.
A lot of investors did not notice it because a author on HotStocked has lead them to believe that the company did not have any of its own products. She also stated in one article that the company had $2000 in cash when it reported having $136, 000 in the third quarter and $76000 in the forth quarter in 2013 . She implied that investors should rely on the MJ index as a metrics for their investment decisions when the site owners themselves advise against this in their disclaimer. In addition this, we have a short who is involved in price destruction of LATF stock. He is hounding the share price down with shorted shares everyday. He is likely an unscrupulous trader/broker who is calling around on this issue and shorting against client accounts. He is mirroring investors accounts with shorted shares. He also may be getting information from these message boards, since Compliance Departments are checking to see if he is assessing client accounts. Longs are dealing with a thief who is trying to rip them off on this stock.
Over 35 percent of this volume shorted, a negative article popping up, a price drop contrary to a general sector increase in prices and a sudden move by owners ( they are traders) of the MJ index to remove the stock which created negative news, investors can conclude that thieves are at work here to kill the upward momentum.
Date VolShorted High Low Close ShortVol RegularVol
Apr 17 29.45% 0.01 0.01 0.01 31,349,719 106,449,953
Apr 16 35.61% 0.01 0.01 0.01 31,585,169 88,689,762
Apr 15 26.09% 0.01 0.01 0.01 31,354,626 120,170,099
Apr 14 34.99% 0.01 0.01 0.01 22,366,186 63,915,205
Apr 11 31.80% 0.01 0.01 0.01 50,283,924 158,101,003
Apr 10 35.83% 0.01 0.01 0.01 58,730,038 163,893,461
I plan to buy more after digging into why this stock keeps going down for no reason. Looks like a trader is shorting it on top of sell orders to drive down the price (no matter how many buyers). At one point over 1 billion shares changed hand of this stock. Most stocks would have bolted well over a penny with this type of volume and with the metrics. The price moves are not making any sense here unless a short is trying to rip investors off on a daily basis. The other thing is that most shorts would not bother with OTC stocks trading under a penny. These stock are too risking for them with limit upside for them ( the stock can only go down less than a penny but can increase to a theoretical infinity). Something is not panning out on this price action.
Add this to the fact that some are consistently writing slanted negative articles about this company. HotStocked has implied several negative things about this company and none have much merit. I noticed that these recent articles are associated with price drops.
Note too: The daily short increased to 35 percent of the traded daily volume. This is very unusual for a stock that trades under a penny.
This really looks like a good buying opportunity. I could not find any reason for this stock trading under a penny. It really should be trading much higher than this. Even the critics have not mentioned any important reason for it to sell off each time. And being removed from the index was not a good reason for a sell off.
The with the index theory is that the founders and writers of the index are active traders. They can also change the criteria and remove stocks from their website without notice. These two factors serve as a conflict of interest. Furthermore, some traders increased their short positions before the story broke. I imagine it was investors associated directly or indirectly with that site. Investors should not rely on that site for the basis of their trades. Also, legit indexes re-balance at a certain time of the year. They don't make willy-nilly decisions to remove stocks at a moments notice. As it stands, they can come up with any reason to remove a stock from the index. For example. if a short reports a company to the SEC and there is a pending investigation, the participants of that index can remove it without notice or proof of any wrong doing according their disclaimer.
This could cause serious problems for long term investors if others start to rely on this made up index.
Investors know this is a good company. The only negative comment is about the shares outstanding but researching this, I dont thing it is vary important. One debtor converted debt into stock because he likely felt the stock price would claim on better business metrics. The other are owned or restricted because the company has debt convertible bonds on its books. They have to keep extra shares for this debt holders. The other jsut remove debt for equity. The company will likely reduce its debt and/or implement a buyback program. The asset values are also increasing, the price should go up long-term.
This is a good stock. There is always someone on these boards claiming they are long and they called or emailed companies with no response. This is just a indirect bash of the company to get price down. Most of the time, they are trying to cover or buy lower or both.
I am glad they removed it from the index. Regulators and shorts have what is known as a span of control, meaning that they cannot research, investigate and control many companies at one time. That index made it easy for them to target certain companies. It does not have any other value to it.
The MJ index does not mean anything to this company. A guy made it up but he really did not know what e was doing. Also, regulators seem to be targeting companies on that index. They likely did not know what companies to look for until that guy put them all on that index. Shorts also found them without doing much research. Mentioned the guy who was trying to make up the index. It is still in development along with the sector. LATF had very little weight on the index anyway. This is better for company. I am glad they took it off. The index has no rating criteria for the companies list. And fund manager are not using it for any investment decisions and they are not required to put any of these companies in their portfolios or funds because it is not really an index, it just a list of OTC stocks that have been grouped together by someone. It is a good idea but it can cause confusion for investors.
Every time he write an article the prices spike. I also think that someone shorted these stocks in JAN 2014 and got caught with their pants down when the sector spiked afterwards. They then complained to regulators. This is the group regulators are claiming they are protecting not shareholder.
This should be a good buying opportunity for some investors providing they get the right entry point. The current negative news will likely pass by the summer. Regulators cannot keep issuing vague warnings and unexplained halts, while letting shorts rip-off investors, without drawing attention to themselves. Someone is going to start putting the dots together. It is also not going to look right to some that they overlooked the sudden JAN 2014 spike in short interest of these companies they are targeting which was followed by a sudden increase in warnings and halts. Someone is making money on extreme measure for minor violations of the rules.
Company needs to focus on its core business and implement a buyback program to defend the share price against shorts who are trying to rip investors off in the MJ sector. It should buyback the shares with the revenue it earns from the MJ segment. Management is slow to react to its external environment.....regulators, unscrupulous brokerage firms employees and shorts who are trying to push down valuations.
This stock should trade higher. Shorts are sending in shares to kill it. This could be good or bad, meaning it provides liquidity to the shares but it also pins them at certain point. It should not have taken over 100 million shares to push this stock over .01. In any other times, 100 million to 1 billion shares changing hand on the OTC market would have moved this stock to over a dollar easy with a good financial report. Also, why did a short seller short it in JAN 2014 and then pull the shares shortly afterwards. The daily short interest is showing pretty much the same story. Price moves up and someone sends in shorted shares to bolt the stock back down. At 30 percent, they are killing the price of the other 70 percent ( 100 percent of shareholders). Something is wrong with this picture. Also, where did all these shorts come from on the OTC market. They had to follow their clients into the sector while trying to get regulators to bless them.
Shareholders have nothing to lose by complaining about this nonsense. So regulators are protecting longs by letting shorts kill and steal from all small investor accounts. Give me a break! This is fuzzy and lazy logic. They cannot prove that all these companies are scams, so they are using inverse pyramid schemes to bolt down the whole sectors. PHOT and CANN were the lead stories in all of it. A reasonable person would have known that shorts who shorted these stocks in JAN 2014 would use these two cases to make money by by spreading more negative across the media outlets.
If the company announces a stock buyback, this stock will likely run up a lot more than .013. The company management needs to defend the stock price while it is low. Why deal in penny when they can deal in dollars. It is only a matter of time.
I paid more in taxes than some people make a year. The capital gain tax went up. It almost discourages investors from even trying to make money. This year may even be worse unless I generate a loss.
He will move to someone else more than likely. This trader is very active in trying to rip clients off. At one point he was calling around to have people post negative articles and posts on message boards. He also tries to bolt my stocks down 10 to 20 percent or more to create panic selling. This sector seems easier to him because regulators are confusing investors with these unexplained halts and warnings for minor violation of the rules. This made it easier for him to blend in without being noticed. He is at it again. He started on it as soon as I took the position. It is the same pattern. Bolt downs on open and trying to bolt the stock way down everyday even when the markets are up.
So far, this is a good company. I will likely to add to my position also. One trader trying to steal money from others accounts will not rock the fishing boat. Hope fully the company will implement a share buyback program to defend the shares against the thief.
Also he is getting disparate right now. He tried to bolt down about 95 percent of my trades but it did not work out for him. He is trying to really hit this trade because he sees the cash moving out of my account. Most are just false move so I don't sell into them. He will have to cover soon. This stock is very risky for him, so he is likely flipping the shares and shorting on weakness. I don't think he is staying in his trades for long except shorts positions where he is using the account shares to cover ( covered puts). It is all going to come to a head. Some are already questioning the use of client account information as a basis traders or computers to trade.
I am not going to sell to him. I will likely have the shares delivered to me. I already know he is trying to steal shares at a discount. He normally tries to bolt my shares way down to create panic.