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By Stefan Sadakov
Apr 09, 2014

mCig, Inc. (OTCMKTS:MCIG) Remains A Volatile Investment

After several day drops on their stock price, mCig, Inc. (OTCMKTS:MCIG) finally managed to escape the red. Their last session closed at $0.71, up 18.53% from the previous day, with dollar volume of 6.63 million. This almost recouped the ground the company had given since their initial descent on April 2 (they closed then at $0.73).

But how long will their rise last, that is the question? MCIG investors have both had reason to rejoice and to fear, because the company remains extremely volatile in share prices. mcig volatile.png

Yes, MCIG rose dramatically at the end february and has since managed to sustain higher price levels. Yes, they are one of the bigger names in the pot industry, and yes - for the first ime, their quarterly financial report has shown net income in the green. A quick look at their figures (all for the period ending January 31, 2014) reveals:

  • cash - $37 thousand

  • current assets - $91 thosaund

  • total current liabilities - $22 thousand

  • revenues - $85 thousand

  • net income - $10 thousand

Yet for all the positive feedback the company has given, they've risen in the charts every few days just to dip in the next few, and a little bit lower each time. At their highest point, MCIG briefly reached a closing value of $0.90. Since then they haven't even come close to that.

Furthermore, some things remain quite uncertain. MCIG has not steadied itself as a strong supplier of the legal cannabis sector and there is no way to know if they will actually make it with such slim assets and cash reserves. Companies they compete with include Tranzbyte Corp. (OTCMKTS:ERBB) and Growlife Inc. (OTCBB:PHOT)

But now they also attempt to expand in other sectors, which is always a risk factor.

MCIG's products may have targeted too many industries, with the tobacco and alcoholic beverage ones being respectively estimated at $1.1 trillion and $1.3 trillion, by admission of Paul Rosenberg, CEO of mCig, Inc. The company announced on April 1 the formation of Liqcig, a strange project that would involve manufacturing of mobile vaporization devices for recreational alcoholic consumption.

The company's last spike in the stock charts may be a reaction to their latest press release. In the announcement MCIG stated that they broke their previous 24-hour sales record by 700%, achieving $28,400 in sales on April 7. This is an impressive achievement especially considering that the revenue came from mCig.org only. Whether the company will be able to sustain the growth is a different matter.

With numbers such as the above in the company's 10-Q, it is up for debate if wide ranging activities would be the most beneficial to them in the long run. As is many times the case, it may be best for investors to be dilligent and do their own research before making a decision. MCIG may very well be on a permanent rise. Or maybe history will repeat itself and they will drop once again – to an ever lower price.

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