As the CEO explains – not ready for a merger or acquisition at this time, East Coast Diversified Corp (OTC:ECDC) is yet to reach its full potential valuation. Indeed, the market valuation is just above $5 million at present, so it is yet to see what this company is capable of. 
The news came out Wednesday morning. East Coast has signed a Letter of Intent with Chinese ZST Digital Networks in order to pave the path for the company’s products to enter this Asian market. The effect on the stock market, however, is not encouraging: a slight decrease of the stock price, accompanied by more than 6 million shares exchanging hands that day. Yesterday, the slight decrease continued with much less trading activity. Shorters actually took their share of the action on Wednesday, being responsible for 1/3 of the above volume. Nevertheless, it seems that ECDC is slowly going on the right track.
What is more, two weeks ago the company filed its quarterly statement for the first three months of 2011, which also brings some positive figures to the general picture. Most noticeable is the revenue, which compared to the same period for 2010 has increased roughly 16 times. However, it is the net loss to pay attention to as well, where the comparison for the same period on an annual basis is the following: [BANNER]
- 2011: Revenue- $164k; Net Loss -$237k;
- 2010: Revenue -$9k; Net Loss – $524k;
Furthermore, the cash at hand at the end of March was a little over $4k, while the total current assets, formed mostly from accounts receivable, still amount to less than 20 times the total current liabilities. Yet, even with these numbers in mind, the decline in the stock price seems odd, given the great news at hand. This topic actually sparkled vivid discussions in financial forums over the Internet as market makers are mostly blamed for this recent development on the stock market.
The fact of the matter is, however, that the better results the company shows, the harder it would be to maintain its share price in low levels. Whether East Coast Diversified Corp is capable of showing a far better balance sheet is another matter entirely.
