Medbox Sees Stock Shares Tumble On Fresh Accounting Concerns
NEW YORK (TheStreet) -- Medbox MDBX, a controversial maker of medical marijuana vending machines that trades on the off-exchange OTCPink marketplace, saw shares fall more than 6% Tuesday after a report accused the company of "MULTIPLE FRAUDS" [the caps are from the report] and a law firm cited the report in announcing an investigation of Medbox.
Medbox shares lost 6.14% Tuesday to close at $30, according to the Web site of OTCMarkets, which operates the OTCPink marketplace. The shares bounced between $26.37 and $33.24 on the day.
The 13-page report was from a company called Citron Research, which says it is in its "13th year of publishing investigative research into suspect publicly traded companies." Citron claims it "has exposed more corporate fraud than any other source on Wall Street."
After citing a previous report on Medbox from the Southern Investigative Reporting Foundation, which pointed to irregularities in Medbox corporate filings, the Citron report pointed to several new red flags. For example, on November 19, Medbox reported a profit for the quarter ending September 30 in a filing with OTCMarkets. However, a January 21 filing with the Securities and Exchange Commission covering the same period shows Medbox is losing money, Citron claims.
The Citron report was published Tuesday morning. Tuesday afternoon, Johnson & Weaver, a law firm, issued a press release citing the Citron report and saying it would investigate.
Medbox followed up with a press release of its own, stating it "discovered some errors in accounting which we have since corrected in the latest financials."
Medbox has not yet responded to TheStreet's request for comment on this story.
Related: Medbox CEO Weighs in on Marijuana Stocks.