teevee,
The last stock of this type I owned was Rare Medium (RRRR). They had less than a million dollars (US) in the till. The CEO was putting his own money into the company. They were trading at $4/share (one year ago). A few weeks before the announcement of a $75 million private placement, the stock got up to $8. When the announcement hit it peaked at $20 (April '99) and then traded in the teens mostly for the next 6 months. After bottoming at $8-ish in October, it began a sustained climb to this date with a peak at $54 and change. On February 1, 2000, they announced a secondary which hasn't impacted the stock. I sold just after the April runup. I would have reinvested in Rare Medium later in the year, but I'd found Jordex in March and accumulated during the summer, keeping me out of RRRR (I'm ahead of where I'd be if I'd gotten back into RRRR :-).
If iTech does a private placement, I'd expect a similar scenario. Then, after a sustained increase, a secondary could be done, too. The market likes seeing big money come into a stock as a vote of confidence in management's vision. I'd expect to see iTech with a Nasdaq listing, drawing more attention to the stock, before doing a secondary. The best thing about being in this kind of stock is seeing a rather predictable sequence of events unfold with it's positive market results. And, we can't forget to mention what a stock split (in a year or two) would do. My goal is to hold for that event.
CF Rebel |
