Hydroponics supplier Growlife (
OTT:PHOT,
Stock Forum) was a weedco darling in mid-March.. that is, before ‘the incident’.
Today it hoped to shake off past controversy and climb back to its previous billion dollar market cap levels.
Everything was fine, said Growlife. Nothing to see here.
Alas, the bottom fell out of the stock today as investors were not convinced by company claims that all is well. Indeed, it seems there are plenty of reasons to be looking at Growlife with a jaundiced eye.
Or bloodshot eyes – tough to tell the two apart in this sector.
The ‘incident’ was a wobble in share price followed by a trade halt as the SEC announced its "
concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in Growlife's common stock."
Partners
abandoned the company. Orders were cancelled. And the litigators began to flood Growlife’s news stream with
class action lawsuit filings and investigations.
The blowback didn’t just hurt Growlife, it took a lot of market cap off the entire sector as rumors of further trade halts at other companies began to spread.
Today the stock resumed trading, with the company claiming not only was it
not being investigated by the SEC, but regulators had no interest in asking questions of management.
This is very good news for Growlife, and for the larger sector. But investors dumped the stock, slashing 58% of value off the company. It now trades at $0.21, a 72% discount to its 52-week high of $0.77.
Part of why may be stemming from a
Seeking Alpha contributor who pointed out in a report today, “On March 31, 2014, in conjunction with the release of its
2013 10-k filing, directors (Tony Ciabatonni, Eric Shevin, Alan Hammer and Jeff Giarraputo) were paid two million shares at a price of $0.02 per share which constitutes a ~97% discount to the then trading price (of $0.58). How was a valuation that is over 90% below trading value established? How can the company continue to grant shares to insiders at the same price for over a year with material changes in the market and trading value of the underlying equity?”
The author continues, “How appropriate is it that the CEO (Sterling Scott) and CFO (John Genesi, who was only appointed mid-year in July 2013) were paid compensation of $1.1 million when the company only had $4.9 million of sales? This implies that two members of the company were compensated ~24% of total revenue alone.”
At best, it would appear, Growlife is a horribly overpriced bubble stock fueling the vacation plans of a handful of executives. At worst, it’s a helicopter shy of Bre-X.
For more,
see my earlier story.
IN OTHER NEWS:
Next Gen Metals (
CSE:C.N,
Stock Forum) has released the speaker and exhibitor list for its upcoming Vancouver
Greenrush medical marijuana investor conference on May 7 and, aside from a devilishly handsome speaker from Stockhouse.com who find himself kneecapped in the parking lot by an executive from Satori Resources,
it’s a pretty good list.
Good enough, in fact, that the company’s stock rose 14.6% on the day.
On the exhibitor side:
420investor.com
Hemp Hoodlamb
Next Gen Metals Inc.
Agoracom.com
International Metals Group
Pacific North West Capital
Bayhorse Silver
I Green Planet Ltd.
Pinnacle Digest
BC Chronic Inc.
Investment Pitch
Rango Energy
Benton Capital
InvestX Capital Ltd
Satori Resources
Canadian Medical Cannabis Partners
Jordan Capital
Stockhouse.com
Canadian Securities Exchange
Korelin Economics Report
Stockpools.com
Cannabis Financial Network
Lexaria Corp.
Supreme Pharmaceuticals
Forever Green
Medicinal Cannabis Resource Centre
VantageWire.com
GreenPlex Services Inc.
Naturally Splendid Enterprises
Wildfire Marijuana
Haywood Securities
Wolrige Mahon
On the speaker side:
Bruce Linton - Tweed Marijuana
Alan Schroepfer - Akamai Acupuncture
Alan Brochstein - 420investor.com
Terry Roycroft - MCRCI
Dr. David Donaldson - University of BC, Retired
Anndrea Hermann - Hemp Industries Association
Dr. Paul Hornby
Kirk Tousaw - Tousaw Law
Chris Bunka - Lexaria Corp.
Daniel Kiselbach - Deloitte
Russ Crawford - Canadian Hemp Trade Alliance
John Berfelo - I Green Planet Ltd.
Michael Martinz - BC Chronic Inc.
Frank Lane - Cannabis Financial Network
Harry Barr - Next Gen
Timothy Foia - Greenplex Services Inc.
Chris Parry - Stockhouse.com
Marcus New - InvestX Capital Ltd
Brian O'Dea - BC Chronic Inc.
Craig Goodwin - Naturally Splendid Exterprises
James Black – Canadian Securities Exchange
George Tsiolis - Agoracom
Aaron Hoddinott - Pinnacle Digest
Brayden Sutton - Stockpools
Enertopia (
CSE:C.TOP,
Stock Forum) announced today that Don Shaxon will be the company's Ontario Operations Manager and assume responsibility over facility location, design, team building, operations and build out.
According to
Stockhouse’s Gaalen Engen, “The medical marijuana veteran has been involved in MMJ since 2006 as a grower under the old MMAR and has spent several years as a consultant for top tier MMJ public stocks located in the United States.”
Stock dropped 7.4% on the news.
UPPERS:
Next Generation Energy (
OTCQB:NGMC,
Stock Forum) owned the day on the charts, with a 19% rise. Jourdan Resources (
TSX:V.JOR,
Stock Forum) jumped 16%.
Pan American Fertilizer, Maple Leaf Green World and Axe Exploration all enjoyed a 14.2% jump.
DOWNERS:
Other than the Growlife debacle, Greenbank Capital (
CSE:C.GBC,
Stock Forum) led the down in the dumps crowd, losing 26.6% of their share price on exceedingly low volume. A lack of bids pushed the stock down hard, putting the stock at its lowest point since it announced it was going to Bitcoin in late December… which was shortly before it announced it was going to weed.
Greenbank
CEO Danny Wettreich was featured in
a piece by ProactiveInvestors today which didn’t seem to help find new investors.
Premier Brands, Victory Ventures, Green Swan Capital and Spearmint Resources all dropped 12.5% on the day.
IN BRIEF:
Supreme Pharmaceuticals (
CSE:C.SL,
Stock Forum) has
paid the $100k/2m share option price on their hopeful South Okanagan MMJ facility. Stock down 11.1%.
Crailar Technologies (
TSX:V.CL,
Stock Forum) hired an
IR firm. They need one: Q4 sales of $0.4 million and a net loss of $3.2 million, with a quarterly burn of $3m bringing regular quarterly private placements of $3m.
As a Minnesota Senate panel
approves a medical marijuana bill for that state, the city of Sacramento is
sending out inspectors to shut down weed farms. In San Diego, a
dispensary robbery ended in gunfire leaving a security guard wounded and the alleged perpetrator dead.
THE MOVERS:
Check back daily for the latest news in this sector.
For more stories on this sector, see our
Medical Marijuana section.
Follow me on Twitter at @ChrisParry
Send tips, news, suggestions to chris(dot)parry(at)stockhouse(dot)com