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.