MediSwipe, Inc. (OTCMKTS:MWIP) Slips By a Fifth
The stock of MediSwipe, Inc. (OTCMKTS:MWIP) took a tumble and closed 21% down, stopping at $0.025 per share by the closing bell. The ticker moved a total of 12 million shares in yesterday’s session, charting a volume spike that it had not seen since late August.
The ticker spent most of the last few months moving down from its late August high of over $0.05. Just as a row of early October red slides seemed to have come to a halt and MWIP recovered a little in the middle of the month, yesterday’s crash may have blindsided a few traders.
With the latest press release from the company coming out almost a week ago, the only potential trigger for the slip appears to be the filing published by MWIP yesterday. The company published a Schedule 14C, informing of plans of a 1-for-10 reverse split, to be executed next month according to plan.
This would effectively reduce the outstanding share count of MWIP from 448 million to around a modest 45 million. This is justified in the filing with the company’s hopes that the split will serve as a catalyst for increase in marketability of the stock.
The thing is, the filing detailing the reverse split explicitly states that the authorized share count will not be shrunk proportionately with the outstanding share count, that is to say, post-split there will be 45 million OS from a total of 500 million AS. Traders were getting worried that this might mean new and considerable dilution, as MWIP‘s President, Mr. Friedman, holds a significant number of Class B preferred shares that, according to the latest 10-Q, automatically convert into common shares at the moment there are enough authorized, unissued shares, and will convert “to equal one half the amount of common stock outstanding … prior to conversion”.
The prospect of post-split common shares being suddenly diluted by the issuing of a large number of new ones seemed to have been the factor that pressed MWIP down yesterday, with no other immediately obvious hindrance.
Other stocks moving heavy volume yesterday include First Titan Corp. (OTCBB:FTTN) who climbed 26% up to a close of $1.62. Biozone Pharmaceuticals, Inc. (OTCBB:BZNE) were less fortunate, slipping 11% to stop at $0.75 per share.
