Updated thoughts on MCLOUD TECHNOLOGIES CORP

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I have a position in Mcloud Technologies and it is again dropping. I understand everything is falling but I am wondering if this would be an opportunity to add to my position if it drops some more (say $1.50 – $1.75 range) or should I simply wait (hold my position in the hopes it goes up in price and puts me at break even or even in the Green).

The stock fell pretty hard in May 2021 (down to $1.13). I did not buy at that time but held my position. I am just thinking maybe it is dropping now because people are selling out of lots of stocks that are not moving quickly.

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Asked on August 18, 2021 12:26 pm
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This looks like a company that is actually growing at a pretty reasonable clip. I believe maybe some investors were worried by the pandemic headwinds the company is facing during its most recent quarterly report, as its installations dropped significantly because of pandemic restrictions.

You are absolutely correct in the fact that impatient investors are dropping companies that aren't moving in price. Small/micro caps fit that mold and although we haven't spoke much on Mcloud, many stocks we've spoke about on Premium (GDNP, GSI, GRN) are shrinking in value despite business operations being very strong.

Small/Micro/Nano cap companies are just not popular right now whatsoever. And, this could continue into the future.

And in regards to Mcloud, this company does pose significant risks from a size standpoint. Again, with a market cap of only $78M, this is very much a nano-cap company and one that is prone to significant volatility. It's also a company with a less established footprint, meaning that COVID restrictions and impacts to the business are likely to have a more amplified effect on the share price than say a well established blue-chip.

If it were me, these are not stocks I'm adding to my portfolio right now. I'm not selling out of any of my small/micro cap speculative plays (GDNP and GSI) but this environment could persist for quite a while and as such I'm avoiding purchasing any more.

Hope this helps? Let me know if you have any other questions.

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Posted by Dan Kent
Answered on August 19, 2021 9:18 am