Last two weeks have not been good for Medbox Inc (OTCMKTS:MDBX) stock as they continue with weekly declines to register new 52-week lows. Th stock has declined sharply from $0.79 per share to level of $0.625 in a matter of five trading sessions. The market cap stands at 19.20 million.
The stock price even registered a new 52-week low of $0.57. In last trading session, the stock price of MDBX declined more than 3% to close the trading session at $0.625. The decline came at a share volume of 196,811 compared to average share volume of 374,726.
The issues
There are numerous reasons affecting the performance of Medbox. The latest red flag associated with the company is its financial reports with miscalculated revenue. In March, the company had to restate numerous financial reports due to errors in revenue reporting. The issue even forced private law firms to take legal actions against company. The SEC launched a probe to get a clear picture of the matter.
With the restated filings release back in March, there were a number of things for investors to frown about. As per the restated 10-Q for 1Q2014, the company net revenue was negative $8900 while in previous report it was positive $331,000. It is evident the discrepancy is huge, and therefore traders considered it better to stay away from stock.
The management on restated numbers
The restated annual FY2012 report disclosed the net revenue at $1.17million while the initially released report had revenue of $2.59 million. The restated revenue for FY2013 was $2.06 million which was almost double in previous report.
When asked Mr. Vincent Mehdizadeh about the restated numbers, he called it as a mere bad luck. He appeared unbothered by huge discrepancies that existed in financial reports. He even refused about getting a SEC subpoena on the same matter.
