Namaste Technologies (TSXV:N) (OTCQB:NXTTF) has been one of the most controversial cannabis companies in 2019. Where the cannabis sector is packing on unprecedented gains unlike any sector before, Namaste stock has performed the opposite—declining at a rapid pace.
Unable to rescue itself from a crisis in head office, Namaste Technologies is now painting a picture that investors want to avoid. The proof is in the shares: Namaste stock is hitting all-time lows of CA$0.55 on the TSXV this week.
Are investors simply done?
As alluded, Namaste stock is suffering from a crisis of confidence in management. It's a big crisis.
Recently, in late March, a 49% stake in artisan chocolate maker Choklat could've boosted shares. But on the contrary, shares continued to crash. It was a worrying sign. With the aim of entering the highly lucrative cannabis edibles sector (expected to be legalized in Canada in late 2019), the Choklat acquisition should've boosted investor sentiment, but it simply didn't.
Then, shortly after, two board members jumped ship, and the Namaste stock downtrend continued.
Looking at April alone, N stock has already lost another 30%.
Namaste stock was a potential investment play in 2018. Through its online medical cannabis portal, NamasteMD, it offers an entire cannabis service for customers. From speaking with professionals, offering viable product reviews, and selling ancillary devices, the platform showed huge potential in a unique business model.
But potential has dissipated (for now anyway) because Namaste Technologies has not recovered well from the termination of former CEO Sean Dollinger.
The controversy started in October when noted short-seller, Citron Research, released a report alleging fraud at the company. A special committee investigation then found one claim to be true: that Dollinger had sold assets to an insider without properly disclosing the sale.
Terminated with cause, Dollinger's departure left the company in disarray. And it's clear to see: 2019 has seen Namaste be the worst performing cannabis stock in February and in March with shares losing 37%.
Now, April is another busted flush.
So what way will Namaste stock go from here? With the company making hints at a "strategic initiative" that involves selling the entire company, is there a future ahead for Namaste stock?
What do you think?
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