MyEcheck Inc. (OTCMKTS:MYEC) Falling Despite Quarterly Success

MyEcheck Inc. (OTCMKTS:MYEC) fell another 13.79% on Friday, despite showing obvious growth in its latest financial report.

Until recently, many analysts were doubtful about MYEC, and for good reason. Last November the company was the target of an extensive paid pump campaign of a couple of notorious promoters such as StockBomb.com and PennyStockLocks.com.

Heavy pumping can usually be taken as a symptom of a company’s lack of integrity, but in MYEC‘s case, the company’s latest quarterly report leaves no room for doubt that it means business.

Sure, MYEC‘s cash on hand does seem somewhat low, but according to the company, that issue’s been addressed. Overall, a net income of $1.32 million is nothing to scoff at – in fact it’s commendable for a PinkSheets company. However, currently, the company’s commercial success isn’t its biggest problem. Rather, its share structure seems to be a reason for concern.

MYEC currently has 4.1 BILLION shares outstanding. That’s nearly a billion more than it had as of the beginning of February 2014. Further, the company’s present authorized share count is capped at 5 billion, so investors are right to be wary of further drastic dilution – a disconcerting possibility, to be sure.

Another thing that should be taken into account is the fact that MYEC currently has a ridiculously overblown market cap of $114 MILLION. Investors should also note that, although MYEC isn’t technically a marijuana stock, the fact that it is lending its services to the marijuana industry adds to the share price’s volatility, but also puts it in a very precarious position.

The SEC and FINRA both advise investors to be extra careful and diligent when dealing with companies with any connections whatsoever to the marijuana market. The suspension of Fusion Pharm Inc. (OTCMKTS:FSPM) can be taken as a warning for investors and companies alike, and the SEC has made its message clear enough – pumps and misleading PR will no longer be tolerated.