MEC Inc (OTCMKTS:MYEC) Is A Turnaround Play
ByJarrod WessonPosted on January 3, 2018 COMMENTS
Today, we are presenting a stock that is showing an impressive amount of trading volume.
It is the stock of MEC Inc (OTCMKTS:MYEC), a leading electronic payment technology developer, licensor and payment services provider.
E-Mobile Platform from MEC Inc OTCMKTS:MYEC
Logo from MEC Inc OTCMKTS:MYEC
At the end of December, many people seemed to assess the company at the same time, and the number of shares that changed hands exploded up. Some days more than 30 million shares were shown as trading volume. This is the typical turnaround price pattern, so we thought that our readers would be interested.
Business
MYEC was incorporated in 2004. It provides platforms that enable real-time mobile and online payments for all applications and users. These systems operate under license to US Patent 7,389,913, “Method and Apparatus for Online Check Processing”, which was granted in June 2008.
We believe that the most interesting is that the company systems can be integrated with the software of banks so that clients can move their money easily between accounts and bank accounts using a real-time secure messaging system.
Additionally, we appreciate that not only individuals use this software. It is mentioned in the company materials that corporations, retailers, governments, payment processors and financial institutions are also customers.
Growing at a high pace
MYEC does not use the usual channels to communicate with customers. Press releases in 2017 have been limited. Instead, the company communicates a lot via Facebook and Twitter, wherein many market participants can get to know the new developments and can also ask direct questions to the management.
We believe that the company is trying to be closer to market participants, which is great.
On checking the company’s Facebook page, we could find that the business results are said to be impressive.
Additionally, we could find out that much of the growth is coming from countries based in Africa. Check the following comment posted on Facebook:
“Quick Africa update: The number of transactions is increasing at a much greater rate now that EmailMoni is live on bet9ja.com. The first week we doubled the number of transaction of the previous week, and this past weekend up about 65% over previous weekend. That said the volume is still very small relative to the potential of EmailMoni, but we are definitely heading in the right direction and growing revenue in Africa, I think this will continue to accelerate now.” Source
When you have to walk two hours to get to a bank, it is always best to obtain banking services using the internet. As a result, this type of online financial services are prevalent in countries, wherein individuals have problems in gaining access to banking services. Thus, we expect the company to be very successful in Africa and South America.
Recent Developments – What’s making volume spike up?
The most interesting developments were released in December. In our opinion, they were responsible for the increase in volume. Read the following carefully.
On December 2, 2017, the company noted via Facebook that eMailMoni, which is also another product provided by MYEC, had been launched by the United Bank of Africa:
“UBA has also launched eMailMoni, a service that lets customers transfer funds via e-mail, while Chat Banking allows clients to perform basic transactions through social media platforms. “For these reasons, and others, UBA is the winner of our 2017 African Bank of the Year award,” the Magazine (Banker Magazine, Pan-Africa) stated.
That’s not all.
On December 11, 2017, the company also released more information regarding the company’s growth and new initiatives.
“Weekly growth rate has been mostly unchanged the past couple of weeks. However, another gaming site is about to go live on the system, and the bank is in the process of activating the system in 6 more African countries that they will announce.” Source
In our opinion, these initiatives should have made market participants react. Usually, share price spikes up when new products are noted, or the company expands into new territories.
But, it did not happen. The best information was yet to be released.
On December 21, 2017, only ten days later, it was released that eMailMoni was available in seven countries within the African continent in English, Portuguese and Chinese languages. We found this information, like other occasions, on the Facebook page of the company, which seems to be quite known so far, as the volume increase right after it was posted.
The bad part – the litigation and the financial accounts
We could find in the iHub forum a lot of information about several lenders, who are currently litigating against the MYEC as well as its CEO. For those who need a rapid explanation of the filings, they claim that the company did not pay its convertible notes in either cash or shares.
That’s not all.
MYEC is also litigating against several companies, from which it seemed to receive services. The following are some of their names:
Seven Miles Securities et al for declaratory relief and cancellation of share certificates, damages for fraud among others.
Ken Maciora et al for securities fraud, breach of contract and breach of fiduciary Duty among others.
On the top of it, the company needs to file financial accounts for the years 2016 and 2017. It does not matter if the company keeps posting that it is preparing the accounts to file them as it happened on December 24, 2017. Until we see those reports, we will not be able to get proof of the fantastic growth claimed on Facebook.
Conclusion
Currently trading with a market cap of $8.6 million, MYEC is an interesting story among small caps. We believe that there are many catalysts on this stock that could make the share price creep up. First of all, showing the fantastic revenues that the African division is said to be making could cause the share price spike. Additionally, if MYEC wins the litigation, the market will also appreciate.
On the other side, there is also the process against the company, which could ruin the reputation of MYEC. Also, if the financial accounts are finally not shown, the market may forget about this name, which could push down the share price.
Dealing with companies involved in litigations and having issues with debt holders is usually quite risky. Thus, we expect a lot of share price volatility in this name.
We will be updating our subscribers as soon as we know more. For the latest updates on MYEC, sign up below!
Disclosure: We have no position in MYEC and have not been compensated for this article.
Replies:
The pump continues
DWIN17 on 1/7/2018 9:11:53 PM
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