HCMC STOCK TO EXPLODE!? 232x PENNY STOCK!? Full HCMC Analysis! - YouTube

felix here and i have an interesting story at  least i think it's interesting guys we're talking  

about a penny stock very very different to the  big stock stocks we normally talk about this one  

is interesting because it's tobacco and i like  tobacco and that might surprise some of you but  

to me it is the most of all notes advertising  is basically banned and it's highly regulated  

and here we have somebody a very very small  company hcmc uh basically jumping up and down  

and trying to get billions from philip morris a  company in which i actually hold your own shares  

but i'm not going to try and let that impact my  view on this now we're going to look at really  

what is that lawsuits are all about what are  their likely chances of success have they got  

their funds to do it and what will be the payout  well because they do with that payout what would  

it mean for the stock price and we're going to  round it up with a look at the actual technicals  

of the technical chart to see where that is  heading and we're also going to look at some um  

sort of insider movements here from the management  of hcmc just yesterday so let's get started guys  

a lot of interesting stuff to get through here  as always for every single like guys i donate one  

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fun to be had there well there is this piece of  filing here form 8k with the sec um the sec has  

all the information basically on anything exciting  that happens and in that says healthier choices  

seeks to be compensated for defendants use of its  patented technology so that's defendant is philip  

morris um philip morris usa and philip morris's  products s a now the allegation is basically here  

that the defendant philip morris have committed  and continue to commit acts of infringement  

directly under indirectly within this  district and the state of georgia into  

alia making using selling offering for sale  importing advertising and or promoting products  

in this district that infringe one or more claims  of the 170 patent and or inducing others to commit  

such acts in this district so this pattern relates  to basically their sort of vape technology now why  

is this important and why does it why is it such  a big deal really well philip morris is basically  

a murray bond business that is sort of slowly  running out of steam as people are smoking less  

right that's the perception people are smoking  less therefore phillip boris we've got a business  

well that isn't quite happening because they  are coming up with these sort of non-burning  

smoke-free tobacco products and their biggest  one is iqos that makes them something like 20  

of their revenue and products and it hasn't  even been rolled out to most countries  

that they're selling it's incredibly more  profitable than cigarettes ever wear they love  

it and they're making an absolute fortune out of  it and yes there are issues surrounding that but  

you know ethically i totally get some people don't  like much backup space but that's where we are  

here so this little little start up here hcmc with  their nine vape shops are basically trying to get  

billions from philip morris over this pattern now  just to put it in perspective iqos philip morris's  

vape product has 13 million users um that is four  million users more than it had a year ago so it's  

growing incredibly quickly and as i said it hasn't  been rolled out everywhere yet insanely profitable  

so therefore is hcmc going to get a huge huge  huge payout well that's what they're hoping for  

now i was an english solicitor in a past life i'm  no longer and i don't give financial advice guys  

but that in mind but the strategy for something  like this would have been you have a big client  

and a tiny guy suing you well you basically ran  him out of town by causing him so much legal costs  

and expense you bury him in paper and you keep  filing all sorts of motions and amendments and  

and just keep appealing basically to the end of  time until they are bankrupt and uh you have won  

in in that way well rather you would get them to  settle but you'd put them under so much pressure  

that um they basically wouldn't know what to  do uh and that is a fairly common strategy  

you just send the other side a thousand  boxes of documents and and say good luck so  

that i i mean i'm not on this u.s attorney but  i think that's perhaps what would happen here so  

do they have the funds to do this well let's look  at who philip morris have engaged um you can see  

here from pacermonitor.com all the motions all  the applications that have been filed in this case  

and then last one here it says that the  defendant has appointed attorney stephen p  

bosco now stephen p bosco works for a while  the gotcha which is a huge u.s law firm and  

also an incredibly expensive u.s law firm and  um he is basically a a um specialist in patent  

and trademark office and i suspect that this  chap is you went to harvard of course and um  

yeah generally speaking these guys a while are a  pretty expensive bunch to work for i interviewed  

with them many many years ago nice people and they  make a lot of money so they are going obviously  

with the top top brass because it is philip morris  they've got the funds to do that now let's look  

at the balance sheet of our hcmc underdog here  and say look at whether they can afford this

so uh these are sales what do we want to look  at we want to look at how much cash they have  

that's really the most important thing here 602  this is again it's from the sec website guys you  

can look that up i'll post the links as well  but if you look at i don't know where this is  

highlighted in green this is just the way  it came out but basically they got 602  

000 us dollars and in most accounts it  says at the top somewhere it's in in  

multiples of a thousand you're talking millions  but no here they have 602 000 us dollars in cash  

as of the 30th of september now in december  uh 2019 they had 1.5 million so they are  

burning through cash at some rate here and let's  have a look at what rate they're burning through  

that well their total sales for the last quarter  that we have numbers for it was 3.3 million  

a year before was 3.4 million that is not  a very good sign their grace path was 1.3  

million a little bit less than the year before  and they lost from operations is 1.2 million  

in a quarter so that basically uh puts in a rather  tough position here 1.3 million after interest uh  

expenses so they obviously have debt too that  doesn't leave leave them well they certainly  

well they could operate for half a quarter on that  basis and then they'll be out of money now there  

aren't other money because on the uh i've got it  on here on our lovely chart on the 8th of february  

they raised 5 million us dollars rather smartly  as their stock is shooting up to the moon  

and that they now have and obviously doesn't show  up yet on the previous account so they've got  

5 million us dollars that's a fair amount to to  sort of battle uh do battle with philip morris but  

if you are losing 1.3 million u.s dollars a  quarter it doesn't last you very long so it  

doesn't put them in very very very strong position  here they basically haven't got the funds at this  

point to really pull through a long piece of  litigation unless they find someone to finance  

the litigation for you i understand that is  possible in the u.s but again expensive now  

before we get to the sort of summary of payouts  and and where they might get to it is interesting  

to note that they have filed just yesterday uh  again with the sac four um forms here for form  

form fours and what are those about well they're  basically when you're issuing stock options to  

your employees or in this case i understand the  management and they've issued quite a lot of them  

um you can see that here tiny tiny number here  but you can see that's 500 that 500 000. or  

that 5 million in total basically they've  issued um a little down here somewhere um  

just under 0.3 percent here we go and they issued  300 sorry two points apologies guys their stock  

options have issued are 0.36 percent off um the  outstanding shares and you can see that a number  

down here again and here's another one and here is  another one um 11 it's that million or is that 110  

million it's hard to tell isn't it because these  numbers are so small um it's billions actually um  

because the stock price are so very small it's so  tiny tiny tiny you get to be slightly odd numbers  

and so they are basically the owners are kind of  cashing in here they're not issuing themselves  

with stock options in the hope that the stock  price will continue to be at this level and then  

they can absolute killing if they do win this but  it isn't on the level this dilution that it really  

matters it's 0.36 percent i just throw that into  the mix because i think it's good to understand  

that they are diluting and they are enriching  themselves here the the sort of senior management  

now what's my take on this what's my summary on  this well if they win and they get a huge payout  

say they get you know billion us dollars because  they're right and they might get a license fee for  

every single iqos selling going forward that  could be a small amount but when you have you  

know four million extra users per year that still  adds up very nicely now in that case they could  

of course take that money and then they could  acquire other businesses in the vape sphere and  

actually become a real big business i mean i'm  saying of course that a business with nine shops  

isn't a real business but they could become a much  bigger business now could that potentially take  

them two to one u.s dollar per share well possibly  but you have to be quite an optimist on this i  

think and then yes you would get to 232 x which  would be lovely and i think that is what people  

are betting on here um that you know they have  that chance to do that now i think more likely  

they'll settle with philip morris because it'll be  a lot cheaper for them and it's a more guaranteed  

thing because remember those big tobacco trials  you know people were awarded i don't know  

billions of dollars for the damage and then philip  morris appealed and appealed and appealed and  

appealed and 10 years later well the claimants  were no longer with us and then they paid out a  

much much smaller sun so typically in these things  the smart thing to do is to settle if philip  

morris is willing they might simply not be willing  they might just be like no we're going to litigate  

this to the end of the earth because if you come  after us and we settle with you other people will  

come after us and want money to so we don't do  that and we've got unlimited funds basically  

and we can outspend you that's kind of the risk  here basically is that you just simply won't get  

anywhere and you're gonna have to wait a very very  very long time now let's have a quick look at the  

chart here we're going to look at just a couple of  indicators here let's look at arrest eye now rsi  

if you know me um generally speaking i put a line  at the 50-point line here and then when you cross  

from below to above the 50 point line let me grab  a highlighter here so when you cross over like we  

did here on the 15th of january that's a buy  signal that's basically telling you it's going  

to go in that direction and it has and then when  it goes back down that's when one might sell off  

we are above here at the top we are in uh what i  would call the uh overbought zone up here i'm just  

going to highlight that it's also in green i was  hoping that would be yellow here it is in yellow  

um you're basically in the overbought area and we  are there for coming a little bit back back down  

to sort of planet earth but we haven't gone all  the way down yet to the 50-point line so it isn't  

a cell of indicator from the rsi it's just saying  momentum is slowing a little bit but you can  

be in that area for quite extended periods of  time so it's not telling us to get out william's  

r tends to be a little bit of a quicker speedier  momentum indicator again it gave us a buy signal  

on the 8th of february i think that was a good  call if anybody traded on that that was certainly  

a good one at the time the stock was at 0.017 now  we're at 0.0043 that is like three times basically  

so that was let me just put a line in there guys  so you can see that also that was where we got the  

indication to buy and now yes we are in hovering  back down but we haven't had a sell signal yet so  

again williams r here is telling us they basically  hold and as always guys this is not financial  

advice these are just the ramblings of me and my  fluffy goat friends guys so please hit that like  

button and i keep donating one cent for every like  as always with all videos so i think really um  

what we can look at here is support levels right  so we are now at 0.0042 which is here where that  

little orange line is there now there are support  levels that we have established here um that is a  

little bit of a stronger one because it's both  a support and there was a resistance before  

so for me that is a little bit more important  one and then we have sort of singular ones here  

at uh i'm just going to ignore the zeros here and  shout out the errors of it so the 3795 and also  

at 36.99 basically 37 and then below that you have  quite a drop to 31 and then once you go below that  

um you're back to to 17 um and then you  actually have a very strong support a  

triple support at 0.15 because we have hit that  point three times and each time the stock uh went  

back up again so that gives you a little bit of a  of a feel for where i think the support levels lie  

so if you are you know as long as you are  above this sort of 39 37 36 range um that  

it is looking pretty good and then you have  quite a drop here to 31 and then below that  

you are basically in in free fall and you can  of course also look at a fibonacci retracement  

uh which gives you actually very wide bands here  also that sees another support level at 25 i mean  

psychologically 25 might be a an interesting  one and then also another one here at 19.  

but there are very very big gaps between these  fibonacci lines as you can see um so again for  

us to go up on the film from where we are to get  into any kind of real momentum from a fibonacci  

point of view we need to go above 50 17 and i'm  ignoring here the three zeros in front of that  

because it's a little easier to remember  so um what's going to happen with this well  

it's it is it is very hard to tell it is a  highly highly highly speculative play and i i'm  

very intrigued by it because it is in the sort of  philip morris space and if there is any positive  

news on that and that could be in a sort of very  small way then this will move a lot there is also  

a short squeeze on this so i believe our reddit  friends are on this and they have an incredible  

power they're sort of democratizing if you will  the whole short industry which it does have some  

very odd things in it i mean we were covering  yesterday ehang and if you read that story and  

then you read the rebuttal and then you see the  videos from the company out and you see well  

they just certainly lied on some some items um  it is a very predatorial way of trading that i'm  

not a huge fan of so the reddit guys are kind of  putting a little bit of fear into it but there are  

still ways for these guys to do it you can short  something and hop out very quickly and and put out  

some dramatic news like we saw yesterday so here  we see that very very nice rally good for this  

company i'm glad they raised some money out of it  they got 5 million us dollars extra a reasonable  

sum for them to to raise i think the market cap is  now at 451 million us dollars that's for nine vape  

shops so obviously everybody is simply banking  on the philip morris payday so if that payday is  

less than this sort of 450 million us dollars  i think you might see this coming down although  

given a lot of retail investors in here it's even  if they get any kind of payout i would say sort of  

north of 50 million us you might see another quick  rally in spike so for people who are interested in  

you know sort of trading this short term keeping  an eye on it making your life more exciting  

i think it is an exciting stock um there is huge  volatility in this there is a lot of money to  

be made or a lot of money to be lost it really  depends on how you look at it but i think it's  

an interesting one i'm going to keep an eye on  this guys um at the moment i think there is some  

positivity left in this this is my personal  view as always not financial advice just me  

entertaining here so let's see where it takes us  guys thanks very much for tuning in and and if you  

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