Medbox, Inc. (OTCMKTS:MDBX) Bounces

In yesterday’s session Medbox, Inc. (OTCMKTS:MDBX) finally broke its red streak with a significant green session. The company’s share price climbed some 38% and stopped at $0.70 by the closing bell, after daily volume swelled to just over 1 million shares traded.

Even though the bounce represented a big percentile swing up, it took place on virtually zero materially significant news and filings. The company did put up a press release yesterday, near the opening bell. MDBX announced that company CFO, Mr. Doug Mitchell, will be a presenter at the 2015 Marcum MicroCap investor conference. The presentation will include an overview of MDBX and will take place on May 28.

The last few months have been a tumultuous ride for MDBX. The company’s stock has gone from $6 per share in January to its most recent lows of $0.50, dropping about 90% within the space of four months. In previous articles we discussed the revenue recognition errors which led to the need to restate multiple MDBX financial reports and an investigation by the SEC.

In a recent interview, MDBX majority shareholder and founder, Vincent Mehdizadeh, discussed those very same issues and called the questions raised by the SEC “easily addressable”. He also believes that there was no real need to restate the filings but company management decided to do it anyway. The discrepancies between originally reported and restated revenues for the problematic periods were actually rather significant. We examined those in detail in an older article.

Considering the nature of yesterday’s PR, it’s unlikely that it was responsible for MDBX‘s surge. It should be noted that the stock was heavily oversold, so a bounce has been more or less on the cards for a while. Following the 38% climb, the stock is back within normal trading ranges, but still on the brink of becoming oversold again. Whether MDBX managed to regain any more lost ground remains to be seen.