ECPL - Sometimes I Hate Being Right

As I noted in tonights XYNH post, history tends to repeat itself.  For a perfect example of this we need to look no further than ECPL, a stock I called the top for last week, much to the chagrin of many traders.  ECPL cratered to $.0003 today, do not say the Guru did not warn you.  Avid readers of my blog hopefully played this stock for a big gain and moved on, knowing that anyone holding this stock too long would be holding onto a huge loss.


GURU warns ECPL'ers

ECPL - The Guru, Once Again, Is Spot On

This morning ECPL mounted a very short lived rally, just as the Guru had forecast, before succumbing to an onslaught of selling the rest of the day.  After effecting a 200-1 reverse split of ECPL shares less than two months ago, this company took no time diluting the stock to the limit again.  So much for shareholder value. 

Interest recently returned as this stock bounced off its lows and peaked early in today's session at $.0024.  Later on  those  buyers at $.0024 found themselves down over 50% as the stock cratered to a low of $.001.  Not exactly a stock you'd want to hold for more than a few hours, which is fine.  Just know what you are getting into with ECPL and don't let others fool you into thinking otherwise.

As I said in the comments section, I am not an ECPL hater.  I am not a stock basher.  I post the facts so that others can make informed investment decisions.  Also I have many new traders that visit this blog.  While losing money can be the greatest lesson a new penny stock trader can learn, I'd much rather give them a profitable head start.  Helping others maximize gains and minimize losses is something I strive for.

I hope my post last night on ECPL saved a few people from losing 50% or more of their money.

ECPL - Will The Rally Continue?

ECPL has mounted a very impressive rally recently, one that has made a lot of people money. That is what trading penny stocks is all about. I have told my subscribers that penny stock traders have very short memories. They trade momentum, not news, and are more than happy to buy the worst penny stock out there, as long as its moving higher.

While I would not charicatrarize ECPL as one of the worst stocks out there, however they did recently reverse split their stock by a 100-1 ratio. Traders have ignored this fact. ECPL has taken their old outstanding share count and divided it by one hundred. This was done in June. The share price has dropped from $8 to $.0017, hardly a profitable move for anyone holding this stock through the share re-capitalization. The only ones making money are those who bought post-reverse split when the stock cratered to $.0003 a share.

Reverse splits happen, but what makes me concerned about ECPL is that after reverse splitting the stock, and screwing over all its long term stock holders, they have gone ahead virtually maxed out the share count yet again! Will the stock require another reverse split so the share count can be maximized yet again? This a bona-fide question that should be considered before purchasing ECPL stock. Why buy something that is going to be worth 100x's less than your original purchase price?

History has a habit of repeating itself. While I think there could be more very short term gains for ECPL shareholders, the medium and longer term pictures are clear. Reverse splits followed by share issuance, clearly not a shareholder friendly stock.