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Saturday, January 23, 2021

Analyzing the Sudden Jump in Marijuana Company Of America Inc (OTCMKTS:MCOA)

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Marijuana Company Of America Inc (OTCMKTS:MCOA) saw a major boost in trading and price per share in Monday’s action. The move highlights an interesting technical pattern for the stock at a time when we might have some hypotheses about possible coming catalysts that the stock might be discounting in its current action. We outline the possible hypotheses below.

In all, we’ve witnessed 38% added to share values of the stock over the past week of action, a bounce that has taken root amid largely bearish action over the larger time frame. The situation may be worth watching. MCOA has evidenced sudden upward volatility on many prior occasions. Moreover, the company has registered increased average transaction volume recently, with the past month seeing 44% beyond what we have been seeing over the larger time frame.

Marijuana Company Of America Inc (OTCMKTS:MCOA) trumpets itself as a marijuana marketing and distribution company. It intends to distribute a range of marijuana, CBD, and related products in the United States and internationally.

The company was formerly known as Converge Global, Inc. and changed its name to Marijuana Company of America, Inc. in December 2015. Marijuana Company of America, Inc. was founded in 1985 and is headquartered in Bonsall, California.

MCOA is a cannabis marketing and distribution player that intends to be the first to distribute a wide range of high-quality marijuana products via a unique distribution and marketing platform.

According to the Company’s press materials, “MCOA plans to distribute marijuana and products related to marijuana as well as CBD and hemp, using a variety of marketing approaches to distributing on a global basis. MCOA provides a wide range of products and services all dedicated to educating and supporting our patient/members in obtaining all the benefits of a cannabis lifestyle. We are developing a knowledge base complete with information from subject matter experts, medical articles and opinions, current articles, YouTube and other videos, blogs, and industry news and papers.”

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As noted above, MCOA shares took flight in Monday’s action, powering over 25% higher on the day on a breakout jump trading volume. And yet, the company made no new filing and released no new headlines or press about operations. So, what are we to make of the action?

We know that recent updates out of the company had been threading together an important narrative that should not be overlooked even though it may have seemed under the radar: MCOA management has made several mentions of an accounting effort to get up to date and current with all filings for prior quarters on an audited basis, and to seek an uplisting out of the pink sheet segment of the OTC.

In addition, the company recently announced that it has filed a Form 10 Registration Statement with the U.S. Securities and Exchange Commission (SEC). According to the release, “this is an important step in helping the Company to raise the necessary capital to fund its projects and expand its operations, as well as provide more transparent and reliable information to investors… Once the registration statement becomes effective, the Company will apply to upgrade its trading tier with OTC Markets to the OTCQB.”

If there is any single catalyst that could spark such a move, that would be it in our estimation. We didn’t see any obvious clues of that occurring. However, we have seen many cases where the stock moves first, and then news hits the markets. Chalk it up to so-called “smart money”, or chalk it up to borderline violations of SEC rules that will go unproven and unchallenged. Chalk it up to whatever you want. The fact is: it happens.

Currently trading at a market capitalization of $88.6M, MCOA has virtually no reported cash on the books, which compares with virtually no total current liabilities. MCOA is pulling in trailing 12-month revenues of $15K. However, the company is seeing recent declines on the top line on a sequential quarterly basis, with revenues falling at -32.5% as of its latest reporting period. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $MCOA stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

Disclosure: we hold no position in $MCOA, either long or short, and we have not been compensated for this article.

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