The Stemcell United Ltd (ASX: SCU) share price is certainly having a great start to the week.
At lunch its shares are up a massive 41% to 17 cents despite there being no news out of the pot stock.
Today's gain means its shares are up a staggering 1,200% since the middle of March when it first announced plans to pursue opportunities in the medical cannabis sector.
This level of return means that a $5,000 investment in the company on March 14 would be worth approximately $65,000 today.
Whilst that is no doubt an outstanding return, not all investors will have been so lucky. Stemcell United's shares actually climbed as high as 41 cents in the days following the announcement.
So with its shares now at 17 cents, investors which bought in at the top will have seen their investment lose over 58% of its value now.
What's next?
Whilst I think there are some pot stocks, such as Auscann Group Holdings Ltd (ASX: AC8) and Zelda Therapeutics Ltd (ASX: ZLD), which could actually have bright futures ahead of them, I have seen very little out of Stemcell United to justify the share price gains.
Furthermore, with just $211,000 cash in the bank and estimated cash outflows of $185,000 for the next quarter, the company is coming perilously close to needing to raise capital.
Whilst it does have an unsecured credit facility available to it, that won't last too long at the current burn rate.
So I would suggest investors avoid gambling on Stemcell United and invest their hard-earned money elsewhere in the market.
