MediSwipe Inc (OTCMKTS:MWIP) With A Disappointing Performance On D-Day

As we wrote in our previous article, last week was quite an eventful one for MediSwipe Inc (OTCMKTS:MWIP). An announcement about September 3 becoming the proposed record date for the spin off of 800 Commerce Inc. (one of MWIP‘s subsidiaries) and the related stock dividend came through on Monday, some new agreements were signed on Friday and they also said at the end of the week that FINRA had approved the first trading day of September as the official dividend date.

This resulted in three consecutive green sessions with increased volumes and lots of excited traders. Having looked at the posts around the message boards, we saw that the extended Labor Day weekend was proving to be excruciatingly long as most of the shareholders were anxiously expecting the start of the new month to be full of optimism.

Unfortunately, it wasn’t to be. Instead of jumping up towards the higher end of the chart, MWIP opened yesterday’s session at $0.062 and it immediately started sliding heavily down. At one point the price reached an intraday low of $0.0485 and while it did manage to regain some of the losses, the ticker finished the session at $0.0519 which is around 8% below the value recorded on Friday. Today trading doesn’t appear to be all that optimistic either. Although it managed to start the day a tiny bit above yesterday’s close, about half an hour into the session, it’s hovering around $0.048 which is a loss of a further 7%. So, what is the culprit?

Well, we can safely say that, despite the good news, there seems to be no stock promotions, which is definitely a good thing. Axxess Pharma Inc (OTCMKTS:AXXE), for example, was targeted by the pumpers yesterday and you can see from our coverage that while there was some initial interest, it all died out just fifteen minutes after the opening bell resulting in around 16% in daily losses. Pollex, Inc. (OTCMKTS:PLLX) is another penny stock that was put under the promotional pressure and you can see from our article on them that while the price jumped compared to the previous value, the intraday movement was mostly oriented towards the bottom of the charts. Not surprisingly, just half an hour of after today’s opening bell, PLLX has wiped out around 28%.

Fortunately, MWIP have managed to avoid the pumpers for quite some time and there’s currently nothing to suggest that they might suddenly become a part of a promotion, but even so, their stock performance is not exactly consistent. There are many ups and downs and just when everyone is expecting a rise due to some exciting news, the ticker plummets, taking traders, investors and shareholders by surprise. That’s exactly what happened yesterday, but there might be a bit more to it.

The management team are indeed hard at work convincing us that the spin off of 800 Commerce is a natural step in the development of MWIP. They say that being separate will allow the two entities to pursue their business plans better and that the shareholders will benefit from the whole thing.

The only problem is, 800 Commerce will take the revenues generated by its products, the assets and the liabilities with it. We wrote in our previous article that although the proceeds from sales of products and services have increased year-over-year, a license agreement was terminated during the the second quarter of 2013 which resulted in a 23% decrease in the revenues compared to the results from the first three months of 2013. Currently, most of the proceeds are coming from the distribution of hemp infused beverages and, as you probably know, this isn’t the business plan that got so many supportive shareholders on board. Also, we mustn’t forget that investors have been disappointed in the past when members of the management team were releasing some shares on the open market which resulted in a less than impressive performance. Let’s hope that this won’t happen again and we can also keep our fingers crossed that the next financial statement will give stockholders a reason to cheer. Until then, MWIP‘s chart movement remains as unpredictable as ever.