Eco-Shift Power Corp (OTCMKTS:ECOP) Jumps Up on Record Volume

Back in May the stock of Eco-Shift Power Corp (OTCMKTS:ECOP) broke through 90 cents per share. Unfortunately the main reason for the impressive climb up the chart was a wide spread pump that even featured a hard mailer brochure. The artificial hype quickly dissipated and the stock suffered a series of devastating crashes that brought it back down to a low of 25 cents posted in July.

Since then for the most part ECOP has been unable to recover its losses fluctuating between 20 cents and 35 cents. Investors have been reluctant to put their trust into the stock and even the announcements about different lighting retrofit contracts failed to generate any excitement. In fact less than two weeks ago the company registered sessions with less than 10 thousand traded shares.

Yesterday ECOP issued another PR and this time though the market paid attention. During the trading hours the record number of 1.7 million shares changed hands surpassing the average volume for the company by more than 17 times. The news that caused all the commotion was the acquisition of Sun & Sun Industries Inc. The deal was first announced at the end of September but it was officially completed on October 20.

Despite the significant announcement and the record volume the performance of the stock wasn’t that impressive. ECOP surged to a high of $0.38 in the minutes after the opening bell but quickly took a step down and remained relatively flat for the rest of the session closing with a gain of 9.38% at $0.35. One possible explanation for the subdued climb may be the fact that once again ECOP has been targeted by paid pumpers.

The email alerts began flying around shortly after yesterday’s trading began. The first pumpers to start touting the company were IPO Society and SIRI.BIZ both disclosing a $50 thousand compensation for their services. In the evening a lot more newsletter joined the campaign – Stock Publisher, Penny Stock Crew, Stock Freak, for a $10 thousand compensation. The efforts to create as much artificial hype as possible are continuing today and even another outfit became involved – 1-2-3 Stock Alerts who bagged $30 thousand. It seems that there are still some people who are willing to pay quite a bit for the continued promotion of the company.

But the red flags don’t stop with the pumps. ECOP’s financial report for the quarter ending June 30 contained the following numbers:

• $39 thousand cash
• $992 thousand total current assets
• $2.1 million total current liabilities
• $46 760 revenues
• $1.7 million net loss

With limited cash reserves the company has been forced to look for external sources of finances. As a result two convertible notes totaling $200 thousand were issued to JSJ Investments. The notes can be converted into common shares at a 50% discount to the average three lowest trades for the ten trading days before conversion. In July ECOP issued another $365 thousand worth of convertible notes with a conversion price of $0.15, more than 50% lower than yesterday’s close.

With all the red flags around the company it may be for the best to use caution. Do your own due diligence and adjust your investment accordingly.