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Message 1859 of 1860
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Subj: Copy of Press Release
By: 13rocks
Date: Mar 4 1998 1:00 P.M PST
Reply To: Msg. 1857 by GReaper
NEW YORK (Dow Jones)--Actrade International Ltd. (ACRT) shares are
down 12%
Wednesday, continuing a three-month slide that a company spokesman
attributed
to a bear raid by a short-seller using the Internet to discredit the
company.
Mitch Menik, a spokesman for New York-based Actrade, said the rumors
that
the short-seller is spreading are untrue, but nevertheless appear to
have
caused selling of the Nasdaq-listed stock.
"It has caused other people to sell in a panic," Menik said. That
has
brought momentum players to the stock and triggered margin calls,
setting off
more selling in the issue.
The short-seller, going by the pseudonym Mr. Pink, has been posting
messages
on Yahoo! Inc.'s (YHOO) finance bulletin boards as well as on Silicon
Investor, another financial Web site. The rumors don't specifically
address
the company's fundamentals.
No user profile was available for Mr. Pink on Yahoo!
Mr. Pink's messages have prompted other Web users to come to
Actrade's
defense, but the anonymity of the Internet makes the reliability of
this
on-line chatter difficult to determine.
What is clear is that shares of Actrade are in a slump. The stock,
which hit
Symbol(s) ACRT & Date
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----------------------------------------------------------------------
----------
03/04 2:33P (DJ) =Actrade Dn 12%, Continuing Slide; Co. Blames
Short-Seller
a 52-week high of 30 Nov. 28, recently traded at 10 1/2 - its low for
the day
- down 1 7/16 on volume of 455,900, well beyond the daily average of
359,400.
The issue fell 3% Tuesday.
Also clear is that Actrade has posted strong revenues and earnings
growth.
In the second quarter ended Dec. 31, 1997, the company posted net
income of 13
cents a share on revenues of $23.1 million, up from net income of 6
cents on
revenues of $8.9 million a year earlier.
The company has a patent on a new financial instrument that helps
U.S.
merchandisers realize cash right away while extending short-term
credit to
their domestic customers. The instrument, a trade acceptance draft,
should
help Actrade's capital division triple its revenues to $66 million in
1998,
Menik said.
But some investors clearly expect Actrade to tumble. The company's
short
interest at Feb. 13 was 1.3 million, about one-third of Actrade's
public
float, according to Menik.
Menik described what is happening as a bear raid, which would make
it a
violation of Securities and Exchange Commission rules. In a bear raid,
an
investor tries to manipulate the price of a stock by selling a large
number of
shares short - that is, selling borrowed shares. If it works and the
price
drops, the investor gains the difference between the price at which he
sold
short and the price at which he buys shares to replace those he
borrowed.
Symbol(s) ACRT & Date
Use Page Up, Page Down, +, -, or press ?
----------------------------------------------------------------------
----------
03/04 2:33P (DJ) =Actrade Dn 12%, Continuing Slide; Co. Blames
Short-Seller
Menik said Actrade's investors, mostly individuals, have been
calling to ask
what the company is going to do about this possible bear raid. He said
the
company is considering using free cash to buy back its stock, but
hasn't
decided one way or another.
(MORE) DOW JONES NEWS 03-04-98
02:33 PM
Additional Codes (P/DIG, R/NME, R/NY, R/US, R/USE)
ACRT Quote
ACRT Profile
ACRT Research
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