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Biotech / Medical : Dynamic Healthcare Technologies (DHTI)
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To: stockvalinvestor who wrote (47)5/8/1997 2:09:00 PM
From: taLuis   of 168
 
Rumor: 500K privately placed stock was sold.

I got this unconfirmed rumor from the AOL thread on DHTI. It's possible
the owner was hitting all the bids from the day of the quarterly report
on 4/29/97. This created an overhang on the stock, driving the price
down. Then today he dumps the balance of the shares after realizing
the market got wise to him. To quote the fella on AOL:

"Private placements work like this: DHTI sells the stock directly to an
investor. The stock is discounted from face by 30 to 50%. A restriction
is placed on the stock. Typically, it cannot be sold for at least one year,
sometimes two. The terms are typically set by the company.

"If this is the case (and I use the word 'if' deliberately), it is possible
that the private placement stock was sold a year ago. At that time, the
stock was trading around $3.75. If the discount to face was 30%, they own
the stock at approximately $2 5/8.

"If the fundamentals of the company have not changed (and there is no news
to support a change), this presents a significant buying opportunity.
However, I would be careful until something closer to truth is available."

Me again. I saw this happen with CREAF. A couple of million shares were
dumped when the stock was in the $13 - 14 range. The stock plummeted to
$9 in a short period of time. The fundamentals of the company were sound
and the stock took off from there to the present $18 range.

I'm not saying this will happen with DHTI. We still don't have the facts.
But if true, then it's worth jumping on this one early.

Luis
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