The wolves are officially circling around Namaste Technologies Inc (OTCMKTS:NXTTF). Famed shortseller Andrew Left and his hit squad have been at it again. The pattern is pretty clear: make some allegations in a research report and get a mob of law firms to issue press releases offering potential class actions lawsuits on the basis that the stock dropped as a consequence of the allegations.
Citron makes money short, the law firms make money on the lawsuits, and the company is crippled in terms of its reputation. However, this strategy can also backfire for the shortsellers if the company is able to defend itself well off the bat. The story is not yet fully written for Namaste, so it will be very interesting to see how this turns out. Thus far, the stock has been hit hard but has yet to be actually served with any lawsuits, and nothing has been proven as far as wrongdoing.
Namaste Technologies Inc (OTCMKTS:NXTTF) operates the largest global cannabis e-commerce platform with over 30 websites in 20+ countries under various brands.
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Namaste’s product offering through its subsidiaries includes vaporizers, glassware, accessories, CBD products, and the company will soon be selling medical cannabis in the Canadian market, subject to approval by Health Canada. Namaste has developed and acquired innovative technology platforms including NamasteMD.com, Canada’s first Health Canada compliant telemedicine application, and in May 2018 the Company acquired a leading e-commerce AI and Machine Learning Company, Findify AB.
Findify uses artificial intelligence algorithms to optimize and personalize a consumer’s on-site buying experience. Namaste is focused on leveraging its cutting-edge technology to enhance the user experience throughout its platforms.
According to company materials, Namaste will continue to develop and acquire innovative technologies which will provide value to the Company and to its shareholders as well as to the broader cannabis market
Moreover, the company describes itself as “an emerging leader in vaporizer and accessories space. Namaste has 30 e-commerce retail stores in 20 countries, offers the largest range of brand name vaporizers products on the market and is actively manufacturing and launching multiple unique proprietary products for retail and wholesale distribution. The Company is currently focused on expanding its product offering, acquisitions and strategic partnerships, and entering new markets globally.”
Namaste Technologies Inc (OTCMKTS:NXTTF) generated sales of $1.9M, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of -8.6% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($471K against $1.1M, respectively).
As we discussed in the introductory section above, NXTTF shares have been pummelled by allegations and a fear of coming lawsuits. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -32%. Moreover, the listing has registered increased average transaction volume recently, with the past month seeing approaching 250% above its longer-run average levels.
However, the company has pledged to battle back against this attack, stating, “The Company wishes to respond to these claims and inform shareholders that its NASDAQ application is progressing but has not yet been accepted or approved, that the Company’s sale of its US assets was not to a “related party” and was not a “related party transaction” as defined under applicable Canadian securities laws and that other assertions made by Citron are equally inaccurate and misleading.“
Again, we don’t know how this will turn out. But, if the company is able to vindicate itself in the eyes of the market, then this is a stock that could squeeze through the roof. Keep a close eye on it.
Pushing the barriers for global distribution, Phoenix Life Science International (PLSI) is the next cannabis play. Just think Canopy x 100, that is how big their plantation in the tropics will be. No lights, no green houses, just maximum growth + minimal cost = home run. Learn More Now!
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