It is an obvious fact that people who trade in OTC stocks prefer to take risks and invest in the firms with dismal financial state. It is the same case when it comes to Megola Inc (OTCMKTS:MGON). The only difference is the risk this time is much higher extended as the company has serious concerns reflected in its balance sheet.
On Wednesday, the stock price declined almost 26% to close at $0.00370. The decline in last trading session ends the euphoria linked with Megola stocks. The share price surged more than 16% on the first trading day of this week. Investors should take a note that it is not justified to get excited about a company that stated to employed zero employees in July 2014.
The financial concerns
As per the last financial results, there are a number of ‘NO’ mentioned in Megola’s balance sheet. The report suggests the company had no assets, no liabilities, no revenue and no cash in the reported quarter. In addition, there were no operating expenses reflecting that Megola was doing nothing in the quarter. It has not published any update or press release in last ten months. It is in the same time-frame, the share prices have dropped from $0.19 to $0.0009, erasing 99.5% of the total value.
The latest report informs that Megola has total three websites. The concern here is that there is not a single website that is operational. The site run by the subsidiary MedCan highlights the message that it will be functioning in no time. However, it is an all entirely different thing that there is no change in the status since November 2014. On analysis of the broader picture, it is evident that the financial performance of the company is dismal, and the recent surge in share price was just due to hype created by third entities.