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Totally Hemp Crazy's Stock Price Increases With Positive News Release Headlines
Mar. 9, 2015 9:46 AM ET | 1 comment | About: Totally Hemp Crazy Inc. (THCZ)
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary - Totally Hemp Crazy, Incorporated skillfully uses key words in headlines, including and related to (1) production, (2) financing, (3) marketing, (4) distribution, and (5) shipments.
- This firm knows how to market their (1) product and their (2) stock.
- N=5 news releases, during February 2015, explain 13% of the close-to-close price-per-share increases in the firm’s stock price.
- The use of “stock promoters” was not investigated; that would require inclusion of a second independent variable and would be likely to increase the explanatory power.
- You can like the firm, dislike the firm, or not care about the firm, but this firm knows how to move their stock price, at least in the near-term.
This article examines and provides a methodology for you to examine stock price reactions to headlines, statistically.
Key Words in Headlines Focus on ProgressWhile the sequence of production, financing, marketing, distribution, and finished good shipments can proceed in a hierarchy, progress is made in a somewhat parallel fashion (see below):
Initial Production Planned, Date Established, Financing Arranged, Scheduled and Execution Completed
- December 10, 2014 PR Newswire: Totally Hemp Crazy Inc. (OTCPK: OTCPK:THCZ) Preparing for Initial Product Run.
- February 4, 2015 Marketwired: Production Date Set to Produce Rocky Mountain High Hemp-Infused Beverages for Totally Hemp Crazy Inc.
- February 6, 2015 Marketwired: THCZ, Inc. Receives Private Placement for Production Run of Rocky Mountain High Beverages.
- February 10, 2015 Marketwired: Production of THCZ's Rocky Mountain High Hemp-Infused Drinks on Schedule for Next Week Along With the Launch of New Commerce Website
- February 18, 2015 Marketwired: THCZ's Rocky Mountain High Hemp Beverages Produced Yesterday by Cold Spring Brewing Company
Marketing Planned to Stimulate Wholesale and Retail Demand
- December 19, 2014 PR Newswire: Totally Hemp Crazy Inc. (OTCPK: OTCPK:THCZ) Preparing to Take Charge with a Partnership with RHINO Marketing.
- January 6, 2015 Marketwired: Totally Hemp Crazy Inc. Starts Florida Road Tour in West Palm Beach Today.
Distribution Established to Meet Demand
- January 27, 2015 Marketwired: Totally Hemp Crazy Inc. (OTCPK: OTCPK:THCZ) Signs Agreement With Mr. Checkout for Distribution of Rocky Mountain High Beverage Drinks.
Shipments from Bottling
- February 25, 2915 Marketwired: THCZ Rocky Mountain High Hemp Drinks to Begin Shipping Out of Minnesota Bottling Plant.
The Firm's 52 Week Stock Price RangeBelow is the 52 week chart of the stock price for Totally Hemp Crazy, Incorporated:
For those fortunate enough to have purchased Totally Hemp Crazy (OTCPK: THCZ) stock at its 52 week low ($0.0075 on December 15, 2014), some may have already achieved a "five-bagger" with the ($0.0483 close on March 6, 2015) 52 week high. This is, no doubt, due, in part, to the firm's skills at marketing, not just their product, but their stock. Below is a recent stock price and volume history from YahooFinance:
Date
| Open
| High
| Low
| Close
| Volume
| Adj Close*
| Mar 6, 2015
| 0.04
| 0.05
| 0.04
| 0.05
| 15,184,400
| 0.05
| Mar 5, 2015
| 0.04
| 0.04
| 0.04
| 0.04
| 2,734,300
| 0.04
| Mar 4, 2015
| 0.04
| 0.04
| 0.04
| 0.04
| 3,488,900
| 0.04
| Mar 3, 2015
| 0.04
| 0.04
| 0.04
| 0.04
| 4,372,300
| 0.04
| Mar 2, 2015
| 0.03
| 0.04
| 0.03
| 0.04
| 9,852,200
| 0.04
| Feb 27, 2015
| 0.03
| 0.03
| 0.03
| 0.03
| 2,456,700
| 0.03
| Feb 26, 2015
| 0.03
| 0.03
| 0.03
| 0.03
| 4,840,700
| 0.03
| Feb 25, 2015
| 0.03
| 0.03
| 0.03
| 0.03
| 5,376,600
| 0.03
| Feb 24, 2015
| 0.04
| 0.04
| 0.03
| 0.03
| 9,425,100
| 0.03
| Feb 23, 2015
| 0.04
| 0.04
| 0.03
| 0.04
| 6,103,900
| 0.04
| Feb 20, 2015
| 0.03
| 0.04
| 0.03
| 0.04
| 6,551,200
| 0.04
| Feb 19, 2015
| 0.04
| 0.04
| 0.03
| 0.03
| 5,701,700
| 0.03
| Feb 18, 2015
| 0.04
| 0.04
| 0.03
| 0.04
| 7,915,000
| 0.04
| Feb 17, 2015
| 0.03
| 0.05
| 0.03
| 0.04
| 18,941,300
| 0.04
| Feb 13, 2015
| 0.03
| 0.03
| 0.02
| 0.03
| 13,806,400
| 0.03
| Feb 12, 2015
| 0.03
| 0.03
| 0.02
| 0.03
| 6,038,400
| 0.03
| Feb 11, 2015
| 0.03
| 0.03
| 0.02
| 0.03
| 17,404,300
| 0.03
| Feb 10, 2015
| 0.02
| 0.03
| 0.02
| 0.03
| 25,813,500
| 0.03
| Feb 9, 2015
| 0.02
| 0.02
| 0.02
| 0.02
| 14,220,700
| 0.02
| Feb 6, 2015
| 0.01
| 0.02
| 0.01
| 0.02
| 5,671,700
| 0.02
| Feb 5, 2015
| 0.01
| 0.01
| 0.01
| 0.01
| 6,734,400
| 0.01
| Feb 4, 2015
| 0.01
| 0.01
| 0.01
| 0.01
| 5,094,800
| 0.01
| Feb 3, 2015
| 0.01
| 0.01
| 0.01
| 0.01
| 4,496,300
| 0.01
| Feb 2, 2015
| 0.01
| 0.01
| 0.01
| 0.01
| 1,345,300
| 0.01
| Some Simple StatisticsI like using statistics to test news releases against stock price and volume. There were N=5 positive news releases (see this portion of the above) since the beginning of February 2015: on February (1) 4th, (2) 6th, (3) 10th (4) 18th and (5) 25th. You should be able to replicate my results, using Excel. I used Minitab software:
Using close-to-close measures, and, in whole pennies, about 13%-17% of the closing price per share over 22 trading days is explained by the N=5 positive news announcements made during February 2015. The results are statistically significant, at the 10 percent level. That is pretty darned good. These news releases are moving the firm's price per share up, their market capitalization up, and they are all being done through Marketwired.
LimitationsI have not investigated the separable variable and/or if any "stock promoters" were used to spam the firm's stock and/or use massive quantities of emails. If I did, they might explain some amount in excess of the 13% explained by the Marketwired releases. Of course, you never get 100% in a regression model; that would represent what is referred to as an "identity" (a perfect explanation of how the world works).
SummaryMany variables will become apparent, in the case of Totally Hemp Crazy, Incorporated. Whether you like the firm or not, they are coming out of the tax loss selling season, post-December 2014, and charging through the January effect, and beyond. They not only know how to market their product, but they know how to move the firm's stock price…up.
This may or may not be sustainable, as they work to develop a brand, and I do not know the magic level of market capitalization that will result from their efforts, but they are making some good moves, and, in recent weeks, shareholders are benefiting. It will be interesting to see what comes next, what kind of "top line" measures and gross margins result, whether private placements will continue to be necessary, and if they can build a brand that will continue to reward long-term shareholders.
You can replicate and extend the methodology in this paper, using Excel, to see just how they are progressing, and in a statistically testable fashion.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
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