CBIS has surged from $0.08 to $1.14 on millions of shares of volume over 5 days. It is a top watch for shorting on green to red action tomorrow. Unfortunately it is hard to borrow at Interactive Brokers and as an OTC stock is unavailable to short at SogoTrade.
Here is some of the “news” that has sent the stock skyrocketing:
July 27: Cannabis Science to Apply to the FDA to Utilize Their Fast Track Procedures to Help Speed the Approval of Its Cannabinoid Medicines in Treatment of H1N1 Swine Flu as AP Report Predicts Swine Flu Could Hit up to 40 Percent in the USA
July 24: Today’s CNN Pandemic Report on H1N1 Pushes Cannabis Science to Move Faster to Release Its Anti-Inflammatory Cannabis Drug as Similarities Between 2009 and Deadly 1918 Influenza Pandemic Cause Concern; FDA Approved Drugs Needed Now to Meet This Urgent Situation
The common factor in all those press releases is that none of them are material to the company. The WSJ article only mentioned the company because the company’s CFO is involved in medical marijuana in California (the company is not). The other two press releases simply state that the company is going to try hard to get its cannabis drug approved quickly. Any self-respecting biotech would not even have put out press releases to say they are trying to get fast-track approval. Everyone tries it. Only a few of those who apply for fast-track approval get to use it. The press releases above therefore offer no real information and serve only to hype the stock. Once the hype dies down the company’s stock will head back to the gutter in which it belongs.
Note: as of the company’s most recent 10Q, it had a net worth of negative $870,000 and tangible assets of $2,467. It is hard to develop and market drugs with no money.
Disclosure: No position. I have a disclosure policy.