MassRoots Inc (OTCMKTS:MSRT) is a penny stock that has started to garner tons of attention lately as its market segment (marijuana) catches fire and shares of the beleaguered stock finally catch a bounce upon alleviating a key constraining burden of convertible debt.
Up until about a week ago, MSRT stock was a graveyard where hope went to die. But then the market got word that all notes issued pursuant to the Company’s March 2016 convertible were repaid in full, leaving the Company with no further obligations under the notes of that offering. The result was a very quick 35% added to share values of the company over the past week of action.
MassRoots Inc (OTCMKTS:MSRT) trumpets itself as a company that operates a technology platform for the cannabis community in the United States. The company’s mobile network enables users to share cannabis content to connect with the legalization movement. Its network is accessible as a free mobile application through the iOS App Store and the Google Play marketplace and as a Website at massroots.com.
The company also operates MassRoots.com/shop, an e-commerce platform that allows visitors to order MassRoots T-shirts, jars, and stickers; and MassRoots for Business, a free online portal for dispensaries to schedule posts, view analytics, and gain insights into followers. MassRoots, Inc. was founded in 2013 and is headquartered in Denver, Colorado.
MSRT is one of the largest and most active technology platforms for cannabis consumers, businesses, and activists with over 900,000 registered users.
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MSRT stock had been on a slippery slope recently, grinding lower seemingly every day, after failing to attain new funding support as a likely consequence of a failed bid to uplist to the Nasdaq exchange in May. Just before that time (in mid-March 2016), the Company took on over a million in secured six-month notes which came due last month. In an 8K a week ago, MSRT put out notice that they were in default.
As a result, about half of the 33 headcount staff was cut and a number of other adjustments were made in a frenetic attempt to shore up the company’s future.
But then the company hit the wires last week with news that the debt causing the default was cleared.
That is potentially huge news for the Company, and we are frankly somewhat surprised that the stock has not reacted even more strongly. This is ostensibly the great escape from default: an outstanding obligation of over $1.2 mln wiped out and out of the way now.
“We’re excited to have this debt fully repaid and behind us. We expect MassRoots to be cash-flow positive on a monthly basis by the end of the year,” stated MassRoots CEO Isaac Dietrich. “As a technology company, MassRoots can scale and generate revenue in every state with a medical or adult-use cannabis law. The 2016 election cycle has the potential to significantly expand MassRoots’ user base and revenues.”
Recent polling indicates strong support for cannabis initiatives on the 2016 ballot: California (Recreational 60-36-4), Arizona (Recreational 50-40-10), Maine (Recreational 53-38-9), Massachusetts (Recreational 53-40-7), Nevada (Recreational 57-33-10), Florida (Medical 73-22-5), Arkansas (Medical 49-43-8), North Dakota (Medical – Unknown), and Montana (Expanding Medical Cannabis Law – Unknown).
Suffice it to say, eradicating the weight of the outstanding obligation has put MSRT stock back on the playing field as the marijuana mania continues into the November 8 voting.
MSRT has a track record that includes a number of dramatic bounces. What’s more, the stock has seen an influx of interest lately, with the stock’s recent average trading volume running approaching 340% above its longer-run average levels. Earning a current market cap value of $31.6M, MSRT stock stands for a company with minimal cash on the books, in a pool of total assets a bit less than $440K, which stands against an appreciable load ($1.20M) of total accumulated debt. Market participants may want to pay attention to this stock.
Traders should note this as important given the stock’s relatively small trading float of barely over 19M shares. It’s something the veterans know to key on: a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders. For continuing coverage on shares of $MSRT stock, and our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!