My Worst Performing Stock- EMC.V Emblem Corp
I had high hopes when I bought into EMC and still do. So far to date I’m down about $1100 or 37%. This is my worst performing MJ stock dollar wise.
Why Did I Buy
The main reason I bought into Emblem was the management. The management team at Emblem was involved in bringing Oxycotin to the market, making huge amounts of money. Not that a support the use of Oxy, as it has ruined many lives due to the addictive nature.
What I Did Wrong
Bought into the the hype! Emblem was hyped up before the IPO, with all the talk of their all-start management team.
I bought right after the IPO @$3.23, which in another post, I said I have learned not to do. The stock dropped off right away but eventually jumped back up to over $4.25. At the time I thought to my self, great I got in early and now this stock will continue to grow.
Tried to average dow/ buy the dip. I like buying a stock when its dropping, that is when we have the most ability to make money. I don’t think it was wrong to average down, but I should have been more patient, but you never know how long or low the dip will go.
Probably didn’t look at the market cap when buying. A the time of my first buy it would have been around 220 million. Looking now this might actually be a pretty normal valuation in this sector. Most producers with their license to sell are valued at at least 100 million.
At one point EMC was down to 1.53, so my original investment was cut in half. The worst part about a stock dropping is that the drop in % is not equal to the % required to get back to even. The stock dropped 50%, but in order for me to get back to even it hast to go back up 100% or double.
Why I continue to HOLD
Emblem is expanding production to 300,000 sq ft, with plans to produce 180 kg per month. At $8 per gram this is about 1.4 million per month in revenue.
This is just their dry flower production. The real value that will come with EMC is on the pharmaceutical side.
With their management team they should be able to create medical products as they have experience in that market. The MJ market is already being seen as a disruptor to the opioid market.
Also the MJ market is very volatile, so we could easily see this stock spick back up to the $2-3 range during certain news periods.
What I Should Do
EMC is down to 128 million market cap at 1.79 per share. I should be buying at these low levels. But with their current production levels I could see them staying at the 100 million market cap area. I also don’t have much cash on hand to average down.
I haven’t panic sold, I believe this stock will go up in the long run. Expansion plans and the pharmaceutical background on management should mean this company will eventually become profitable.
Some times even if you know you should be doing a certain strategy you just don’t have the cash on hand. Which is why people always say to have cash on hand.