David, I don't like it for long a long play. . .but it looks interesting as a short-sell play.
When a stock gets a real investment. . .the idea is to keep it quiet to keep the price from running away until the deal is officially announced. But seeing as this is a company from beautiful Palm Beach county Florida [one of the penny stock scam capitals] it makes sense that they would announce the desire to take a debt position.
And of course it is turns out to be convertible debentures. . no doubt floorless. . . so the "announcement" of such gets fools to bid it up [11/16 today] so they can start shorting it at a higher price to drive it down as low as possible prior to the conversion "by October."
NOW read that press release:
WEST PALM BEACH, Fla., Aug 19 (Reuters) - Able Telcom Holding Corp. on Thursday said it approved a term sheet from an investor group headed by Nelson Peltz, Peter May, Kerry Packer and Triarc Cos. Inc. (NYSE:TRY - news) for the proposed purchase of up to $40 million of Able convertible subordinated debentures.
Triarc, a New York-based holding company headed by Nelson Peltz, Peter May and Kerry Packer of Australia, have begun due diligence on the proposed transaction, which both Able and the investor group hope to complete by early October.
The deal is subject to several conditions, including completion of a satisfactory due diligence review by the investor group, approval by the boards of directors of the members of the investor group, the execution of definitive documentation and other customary closing conditions.
So to answer your question, their assets and their market cap take a backseat to these new trading pressures on the company's stock. Remember this is not a contest where the best company wins. . . or we would just buy all stocks based on PE ratios and sales ratios.
Now perhaps after October and confirmation that all debentures have been converted, the company may be worth looking at more closely.
Best wishes, David.
Rande Is |
