The stock market does not look favorably on fraud. Today is a disaster for Namaste stock as a result.
In a damning press release, Namaste Technologies (TSXV:N) (OTCQB:NXTTF) has confirmed the firing of CEO Sean Dollinger following an internal investigation into securities fraud. Namaste stock has plunged 21% on the news.
Namaste Stock
In what is considerably troublesome news for the company, Canada's Namaste Technologies announced it has fired CEO Sean Dollinger effective immediately.
The termination spawned a massive 21% drop in the first few hours of morning trade.
At the time of writing, N stock is selling for $1.18 CAD, having recovered a small amount of those losses since.
Fraud Allegations
The e-commerce cannabis company, with a net worth of over $400 million CAD, faced a roller coaster ride in recent months. A short seller accused Dollinger of securities fraud, which spawned an internal investigation into the former CEO's actions. The accusations first surfaced two-weeks prior to recreational cannabis legalization in Canada.
Conclusion Affects Namaste Stock
According to the company press release, the board concluded that Dollinger breached "fiduciary duty." The company found "evidence of self-dealing" in regards to the sale and subsequent transactions of Namaste’s US subsidiary Dollinger Enterprises US Inc.
Dollinger and Namaste’s head of marketing, David Hughes, both happened to have “beneficial interest” in this sale.
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Legal action will now be taken against Dollinger for “damages and disgorgement” related to the findings of the investigation.
Namaste Stock Ambiguous Future
Namaste Technologies has appointed Meni Morin to act as interim CEO. Morin is the company's chief product officer and director of AI.
The news doesn't stop here for Namaste stock investors, however. The company has now "initiated a formal strategic review process to consider all value-maximizing alternatives, which could include exploring a potential corporate transaction that may, but not necessarily, result in the sale of the Company."
In short, it's now very possible that Namaste Technologies may be put up for sale altogether. The news must rock investors as the future now hangs in the balance for Namaste.
Are you a Namaste stock investor? Are you shocked by the outcome of this investigation?
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