Medbox Inc (OTCMKTS:MDBX) Sinks by a Third

After a three-day green streak that saw Medbox Inc (OTCMKTS:MDBX) climb over 100%, a sudden reversal in yesterday’s session saw MDBX lose over a third of its market cap in a matter of hours. Volume cooled off to just 4.4 million shares traded and the stock dropped 35% to stop at $0.16 per share.

As we cautioned in our previous article, it seems this recent price spike was more or less fleshed out by people looking to flip and make a quick buck off the stock and not by some grand resurgence in investor interest and enthusiasm about MDBX‘s future.

On July 6 MDBX announced a top-level change with Jeff Goh replacing Guy Marsala as CEO of the company. Marsala will be vacating his position in the company’s BoD as well. An 8-K filing that trickled through after the markets closed on the next day showed that Mr. Marsala was getting a rather delicious severance package. He is to receive $500,000 in severance pay, divided in $30,000 monthly installments, plus a grant of options to purchase up to $335 thousand worth of MDBX stock at the closing price on June 30, which just so happens to be the lowest price MDBX traded at within the last two full calendar years.

It’s hard to tell whether yesterday’s price shrink was due to people simply playing the short price spike and cashing out, or there were actually others, who were displeased with the most delectable severance package Mr. Marsala received, despite the horrible things that happened with MDBX‘s stock price on his watch.

MDXB got in trouble with the SEC over errors with revenue recognition in multiple financial reports, which in turn needed to be restated, and with good reason, it seems. The updated versions of the filings showed considerable differences in revenue figures that were to the company’s detriment.