The big knock on shroom companies in the public markets right now is that most of them are chancers rather than pioneers – markets guys looking to acquire any asset that could convince a psychedelics investor to toss coin at their stock.
The track record of EGF Theramed (aka Theramed, aka Evatrade Health, aka Auxcellence Health) in building shareholder value has been spotty at best over the last few years, with a 100 to 1 rollback in its recent history, a new CEO in April that was gone by May, spin offs and trading suspensions, shifts from biotech to CBD to now psychedelics, court ordered asset disposals a few years back and, more recently, a request from the OTC Markets to explain what was going on with $700,000 worth of recent promo.
The history of this company is oof-worthy, but our focus should be on the now. Does EGF Theramed have actual assets in the psychedelics space that are worth buying into?
That depends on your outlook.
It also depends on whether you bought in on that big promo campaign and got left holding the bag.
EGF announced on May 22 it was going to buy an asset, Green Parrot, a Jamaica-based shroom retreat set-up (Jamaica’s lax outlook on shrooms is giving a lot of early market runners cover), and raise $2 million at $1.10 per share. Shortly after a big promo campaign ran the stock to as high as $2.
But before that raise could be closed, someone starting pounding out EGF paper, driving the stock price down hard, leading the company to amend the terms of the raise three weeks later to $0.75 per share.
Today the stock opened at $0.62 per share. So much for that promo campaign, eh?
Full disclosure: Our own company sells market awareness campaigns to public companies, but the $300k-for-two-weeks deals we see frequently from companies desperate to shift stock right now, and to hell with the subsequent sell-off, make little sense. Our highest price packages cost 1/5 of that, and last six months. Our budget programs run far cheaper still.
Admittedly, we don’t drive 200,000 Google ad clickers to a landing page on a Tuesday morning, convincing daytraders to buy on the pump, only to see them sell off on their 15% profit the following day. Our investors stick around for a while, anticipating their chosen company will build something substantial over the weeks and months ahead. They like that we challenge our clients to deliver, and hold them to a higher standard than FastPennyStocksShootingOutMyAss.com or GermanNutsoPromoDepot.eu.
A sample of the bullshit from Dear Wall Street leads off with “May Be One of the Most Promising Companies to Watch Right Now in the Massive Shroom Boom!” and concludes, “Any Big Pharma company that acquires or licenses [EGF acquisition] Pharmadelic Labs IP would have something equivalent to a magical oven that every chef dreams about having in his restaurant to gain that little extra edge over the competition!”
Good grief.
EGF has effectively shown their hand as a promo dependent paper churn with a heart attack monitor for a stock chart and a management team that struggles to answer to their maneuvers in any way other than to say, “Wasn’t us, someone else wrote that, we only paid the guys who paid them to write it.”
Who’s going to trust them now? How will that financing close when it’s underwater even after a 25% price reduction?
This makes my heart hurt, because there’s a ton of ways for pubcos to stake their claim in the shrooms space and really build a business without resorting to cheap tactics with a non-cheap price tag. That honest efforts keep getting crowded out for dough by miners-cum-CBD hawkers-cum-esports promoters-cum-shroom guys is a drag.
EGF has a $10 million market cap, and that might be about right for what they have. But they won’t enjoy any sort of rise in that valuation until they find Jesus and make legitimacy the focus of their business model.
— Chris Parry
FULL DISCLOSURE: There may be a real company buried in there somewhere, but I can’t even.
