Potnetwork Holdings Inc. (fka POTN)

[justinbailey]

Bad Q1, surprise-acquisition-cost. Q2 had acquisition also! ---MUSTREAD

Sour Q1 due to Pot Network Holdings Inc's delayed release of purchase acquisition details on acquiring DiamondCBD. In order to make the purchase possible, Potnetwork Holdings Inc had to create shares, sort of like how the US Treasury and Federal Reserve conspire to print money and causes economic inflation which is never a good thing. Shares increased from 137million common stock shares to 572million. In other words, all shareholders ended up owning A LOT less of the company after Q1 report dropped. Everyone scrambled to sell because there was no PPS valuation and year-end projection done at the time and everyone considered the trading activity for all of Q1 as scandalous and under the veil of inaccurate financial data. Those in defense of the Q1 bomb were trying to calm this board down by explaining the following:

1) POTN owners have a major stake in the company, 300million shares of restricted common stock. Any pump&dump-like dilution of sharesout/float would have a greater negative effect on POTN owners compared to joe-shmoe shareholders like you and I, so the dilution was justified and POTN was not a pump&dump scam company.

2) A purchase is a purchase; There was an obvious cost involved somewhere. It was either going to be dilution or a large loan. POTN didn't have a large amount of cash for the purchase unfortunately.

3) The company is the only MJ-related company that actually makes money and the dilution was justified due to it being for the sake of expansion that has already yielded millions in sales.

In the same way that a bad Q1 caused the stock to go from .099 to .055, the inverse *should* happen via Positive Q2 where we go from where we are now (high 6's) up to .08x/.09x territory. Unfortunately, there were too many large entities scooping up millions of shares today between .06 and .069 as well as some other factors. Here are some of the possible outcomes when Q2 posts:

a) NITE and a few other MMs were seen on today's L2 as buying millions in the mid 6's and they will use those shares to lessen the effect of a positive Q2 and PPS doesn't exceed 8's, several walls of 100K+ shares till the close. If enough longs get frustrated and sell, then MMs will start buying up on the cheap, will tally up their shares and if they own a large enough % of total sharesout, they stop the monthly share give-away manipulation loop and a breakout occurs, we get a new 52week high in .10 land, but "we" isn't you & I & everyone on this board, "we" is a few of us faithful longs and the MMs.

b) NITE was seen on today's L2 as buying but was in-fact doing BUY TO COVER, aka getting out of their short position. There's no way to tell a BUY from a COVER when staring at an L2 screen. Other MMs that scooped up shares allow a little incline to low 8's, but then we end up repeating the cycle of going back to .05s/.06's.

c) This is the worst case scenario and it involves insider trading and misreporting of acquisition cost. Basically, there was a news PR about another acquisition this quarter that most of us forgot about.
https://finance.yahoo.com/news/potnetwork-holding-executes-diversification-strategy-120000410.html

So, the way I read that PR was that a simple domain name was reacquired. A few hundred bucks, right? Maybe wrong! We have no idea what the cost was for that project. Did they hire a bunch of marketing and advertising consultants and purchase assets to get it all started? It might not have been a simple domain name purchase. I shall now quote the eye-opener of that PR: "Upon conclusion of the transaction, PotNetwork.com will operate as a wholly owned subsidiary of the Company." You don't just buy a simple domain name, hire some webdesigner at a normal wage and call that a subsidiary of the company. You inject lots of money into it as a very large project. So where did this money come from? Did it eat into a large chunk of net-revenue? Do we have more dilution coming?
Here's where the insider trading theory comes in. So why the massive selloff on a good PR-day? Well, just as there was a very large and suspiciously timed selloff and massive shorting by MMs when we got to .099 52week high days before Q1 drop, we might have the same thing going on this quarter, where POTN leaked info to MMs about the actual potnetwork.com acquisition cost.