Whether you see Farmmi stock as just another fairy-tale penny stock driven by retail hunger, or a legitimate long-term opportunity, it’s really a story of two sides. Farmmi (NASDAQ: FAMI) stock rose 16% with Wednesday’s market open. In regards to news, the company showcased an extensive product line along with cultivation sales yesterday – but there is more than meets the eye for this popular fungi stock.
It seems that Farmmi has adopted a strange guise when it comes to public perception. With the adoption of such an aggressive growth strategy, management is hell-bound on consistently raising funds – which evidently raises a few questions as to the legitimacy of the ballooning meme stock.
Company revenue has remained balanced at around 30$ million per year – over four consecutive years. Yet the alarm bells ring louder looking at profitability, which hasn’t been so steady – recording that earnings per share dropped from $0.30 to breakeven over the last few years.
Farmmi recent move to acquire a forest makes sense in the context of the company’s limited size – if the company can increase profitability from sales then shareholders will finally be able to reap some sort of reward, but the road there, to be completely frank, has been nothing but humiliating for Farmmi’s early shareholders.
Farmmi stock has been diluted multiple times. In April 140 million shares were offered at 0.30$ – a 70% discount to the previous price of $1. This happened again in September, when shares started to creep up towards $0.60 the company decided to offer a staggering 368 million shares at a further discounted $0.22.
This sort of fundraising is a critical hit to shareholders, and who is to say that it won’t happen again if the stock starts to rally. Sure, Farmmi has a unique angle and has engulfed the world of eager retail traders – but is the company balancing its future precariously on the shoulders of meme-stock investors? After yesterday’s product showcase, Farmmi stock is trading just under $0.40 with a daily gain of just over 10%.
Should You Invest in Farmmi Shares?
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