Fortitude Group Suspended by SEC Yet Marijuana Stocks Rally

One contributor to the better sentiment may have been the reaction by investors to news out after the close on Thursday on GrowLife (OTC: PHOT ), with the CEO resigning for “personal reasons” and the President assuming his duties. PHOT traded in line early Friday with Thursday’s prices before moving significantly higher later in the day, a potential signal that the recent decline following its April suspension has played out. More likely, the market bounced from very oversold levels because the suspension of FRTD wasn’t as surprising as some of the more recent ones have been.

While I have never studied the company in depth, there were several yellow flags, including being listed on the Pink-Sheets, being late with its Q1 disclosure, and a barrage of press releases (19 in two months, including one just before the suspension on Friday): (click to enlarge) The most disturbing one, regarding the potential acquisition , caught my attention when it was released: Fortitude Group, Inc. announced today that they received a Letter of Intent (LOI) to be purchased by a fully reporting OTCQB company. The name of the proposed acquirer has been withheld due to the LOI having a confidentiality clause. The LOI also includes a 10-day due-diligence period with an estimated closing date for the transaction of May 30, 2014.

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