Shares of Terra Tech Corp (OTCMKTS:TRTC) exploded higher on Tuesday following news that the company is starting a share buyback program, with the initial tranche fixed at up to $20,000,000 of the Company’s common stock. The news helped to send shares ripping. It’s not often that you get a buyback program in an OTC stock. So, this is some shock-and-awe board action. Of course, one might also note that the company only has about $1.6 million in cash on hand. Typically, big share repurchase programs are launched by companies that have too much cash lying around.
According to the release, “This share buyback program is in addition to the previously announced purchase of shares of the Company’s common stock in connection with the settlement of litigation with members of the Vande Vrede family. The Company expects to receive approximately $36,000,000 upon the closing of previously announced asset sales. Repurchases may be made at management’s discretion from time to time on the open market or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. Any shares acquired will be held by the Company as treasury shares. As of August 2, 2019, the Company had 109,278,898 shares of common stock outstanding.”
Terra Tech Corp (OTCMKTS:TRTC) has positioned itself in the cannabis space as a company that engages in the design, marketing, and sale of hydroponic equipment with proprietary technology to create sustainable solutions for the cultivation of indoor agriculture in Newport Beach and Irvine, California.
TRTC operates through two segments, Hydroponic Produce and Cannabis Products. The company offers environmental controllers and timers; ballasts; bulbs; reflectors; nutrients; and portable hydroponic trailers and The Big Bud and Little Bud, which are custom fabricated proprietary cultivation systems for horticulture enthusiasts, local urban farmers, and greenhouse growers
Additionally, TRTC operates as a retail seller of hydroponic produce, herbs, and floral products, which are distributed in the Midwest and the Northeast United States; and produces and sells a line of cannabis flowers and cigarettes, as well as a line of cannabis pure concentrates, including oils, waxes, shatters, and clears to dispensaries in California.
The company operates through multiple subsidiary businesses, including Blum, IVXX Inc., Edible Gardens, MediFarm LLC and GrowOp Technology.
Blum’s retail medical cannabis facilities focus on providing the highest quality medical cannabis to patients who are looking for alternative treatments for their chronic medical conditions. Blum offers a broad selection of medical cannabis products including; flowers, concentrates and edibles through its Oakland, CA and multiple Nevada locations.
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As noted above, TRTC just announced that the Board of Directors has authorized the repurchase of up to $20,000,000 of the Company’s common stock.
The chart shows 25% during the past week in terms of shareholder gains in the name. What’s more, the company has seen interest climb, with an increase in recent trading volume of 91% over the long run average.
Chief Executive Officer, Derek Peterson, said, “We believe that Terra Tech’s current market value does not reflect the underlying value of its business and future prospects, and that implementing a share buyback program is the best way we can return value to shareholders. We have several growth initiatives in the pipeline and are engaged in a fundamental restructuring to improve profitability and build value for our shareholders. The share repurchase program is supported by our continued focus on building a stronger, more efficient business based around premium quality, recognizable brands.”
Currently trading at a market capitalization of $38.8M, TRTC has a reserve ($1.9M) of cash on the books, which stands against about $8.6M in total current liabilities. TRTC is pulling in trailing 12-month revenues of $31.7M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 19%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $TRTC stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $TRTC, either long or short, and we have not been compensated for this article.