Surging short selling pressure poses the biggest risk to Innovative Properties Inc (OTCMKTS: INNPF) long-term prospects. The stock is closing in on all-time lows as bulls continue to lose the fight against the bears. A 30% plunge in recent weeks affirms waning investor confidence, after a stellar start to the year.
INNPF Catalysts And Share Price Analysis
The sell-off comes as a surprise given that the company has served a number of catalysts that in most cases would have supported further upside action. The Company is fresh from expanding its footprint in Washington having completed an investment in an established cannabis extraction and production facility.
Michigan is another state that the company has set sights on, having completed an investment in a Municipality approved property boasting of 10 approved cultivation licenses. The company has also moved to strengthen its cannabis distribution efforts with an investment in a leading retail and supply chain software platform.
Innovative Properties balance sheet has also received a boost on the closing a $35 million private placement of debenture units. With the new funds, the company remains well positioned to implement its growth strategy.
The stock has continued to edge lower even on recent developments affirming the company’s long-term prospects. A plunge to the $0.51 mark leaves the stock susceptible to further drops as it is currently staring at the $0.50 technical level.
A breach of the technical level would give short sellers a reason to continue pushing the stock lower, in continuation of the steep downtrend.
Innovative Properties needs to hold above the $0.50 mark if it is to have a chance of bouncing back to this year highs.
About Innovative Properties
Innovative Properties does business as Nabis Holdings. It cast itself as a holding company investing in high-quality cash flowing assets across various industries. The Company has operations in the blockchain as well as real estate and security sector. In the recent past, the company has increased focus on the cannabis sector.
What Next For Innovative Properties
Innovative Properties has taken a significant hit. As it stands, it remains susceptible to further drops. However, the company pushing for market share and growth in the cannabis sector could turn out to be a catalyst that would help reinvigorate the stock’s sentiments in the market.
In the recent past, the company has sought to enhance its cannabis production capability with an investment in an established extraction and production facility in Washington. The company has entered into an agreement to purchase extraction & production equipment from PDT Technologies LLC
In addition, Innovative Properties has acquired licensing rights to produce Chong’s Choice Brand CO2 Vape cartridges.
“Washington State is a relatively mature state with proven metrics, thus Nabis will be looking for additional investments in the state along with many other limited license states in the near term as part of the Company’s multi-state cannabis investment strategy,” Innovative Properties in a statement.
In an effort to further strengthen cannabis cultivation and production capacity, the company has acquired a property in the City of Bangor in Michigan. The property boasts of municipal approvals for ten cultivation licenses and one processing license.
Innovative Properties intends to start cannabis cultivation at the facility in the third quarter, with an expected produce of 3,750 lbs. per harvest.
In addition to strengthening cannabis production capacity, the company has also moved to strengthen its prospects on the retail and supply chain front. The company has since acquired certain assets used and marketed under Bloomboxm a retail cannabis, software platform.
The acquisition should strengthen Innovative properties presences in the U.S Cannabis market given its robust ecosystem.
“Nabis will benefit from Bloom box’s revolutionary identity platform, which redefines consumer-business interaction through data and enables a new level of personalization at the retail level. Integrated systems for menus, ordering, product content, consumer marketing, loyalty programs, and more, will drive success with both existing and new customers,” Innovative Properties in a statement.
The closing of a $35 million private placement of debentures also paves the way for the company to strengthen its efforts, in the push for growth and opportunities in the cannabis sector.
Innovative Properties has taken a significant hit even on affirming its long-term prospects with a string of positive developments. The stock finds itself in a precarious position given the soaring short selling pressure.
The stock stabilizing above the $0.50 should fuel chatter of a potential bounce back. Conversely, a breach of the critical technical level could result in the acceleration of the sell-off wave.
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Disclosure: We have no position in INNPF and have not been compensated for this article.