If there’s one company who got a free ride on the cannabis hype wave of the past 18 months, it’s been The Green Organic Dutchman ( ). These guys have managed to raise $336 million dollars with zero revenue and have had their stock shoot up to $10.24 after a $3.65 IPO six months prior.
But, easy come, easy go.
After recently breaking the $10 threshold, TGOD is now trading below its IPO price at $3.33. Fans of TGOD will call this a buying opportunity, which may be a solid point. The recent drop is probably indicative of a selloff from those who got in at between $1-$2.
What we do know is that TGOD’s chart looks like a waterfall at the moment.
DISCLAIMER: We Have Never Liked TGOD
If we take a look through our TGOD archives we have previously pointed out that we believe this company is built on hype rather than anything tangible. TGOD’s brilliant pre-IPO raises put them in a solid cash position from day 1 as they had 4,000 investors on board before the company went public through a very unique hybrid public/private placement.
We believe this model can be used by future companies to raise capital from retail investors, making the big brokerage houses and accredited investor titles less meaningful. Those who bought into TGOD at under $1.00 are still laughing, but those who bought near the IPO are most likely a bit uncomfortable at this current share price.
The company has had trouble generating revenue, which as of today is still zero. Over the summer the City of Hamilton crushed TGOD’s dreams of building a massive greenhouse in their city. Local farmers and citizens caused an uprising against TGOD’s proposed 968,000 sq/ft in their city.
If TGOD can recover it will come down to their ability to deploy their cash to create a company that generates revenue to back up their valuation. Their ability to ride the hype wave has come to a crashing halt, and it is unlikely to continue into the future.
TGOD will have to prove that they can create solid brands that can move products, or else, it’s mostly like curtains for these guys as early investors will continue to sell and finding new capital to inject will hard to find once things dry up and investors have moved onto a different company or sector.