This is what today's press release should have read............
***** Note: This is not an official press release. It is strictly to serve as my satirical interpretation of what today's press release means as it pertains to the events that have transpired over the past two months and as it pertains to Plaintree's shares. ******
Mike Middleton Eats Crow........Taurus Capital Pays Up To $1.39 for Plaintree Shares!!!!
OTTAWA, Oct. 25 /CNW/ - Plaintree Systems Inc. ("Plaintree"), is pleased to announce that it has received from Taurus Capital Markets Ltd. ("Taurus") $436,000 to exercise compensation options for the purchase of 400,000 units of Plaintree.
This endorsement in Plaintree's Turnaround Strategy and Fiberless Business Plan by Taurus is sure to be received well by the investment community. It is a strong statement that effectively eliminates any credibility that Taurus's analyst, Mike Middleton, has remaining and alleviates concerns created by the recommendation he issued. It certainly raises some questions about the trading that was conducted through Taurus during the months of September and October after the recommendation was released.
On August 30, 2000, Mr. Middleton issued a 'Sell Into Strength' recommendation with a $.50 target price. This recommendation was done after Taurus sold 2,868,500 shares into a rally between August 23 and August 29, 2000. During this rally, Plaintree shares trade atop the volume list of the TSE, as over 22.3 million shares changed hands, seeing the share price explode from $.81 to $2.04 during the 5 days.
Middleton’s recommendation completely took Plaintree by surprise, particularly after Taurus had recently raised $10,000,000 for Plaintree through a Private Placement 5 months earlier in March. Even more surprising was the fact that Middleton was quoted two days earlier, on August 28, 2000, as praising Plaintree's turnaround. This is the excerpt from the story published by CANADA-iNVEST.com, (see canada-invest.com for the entire story).
Mike Middleton, an analyst with Taurus Capital, thinks that the company’s hard work of transforming itself has been successful and is on the verge of big things once products are launched.
“Plaintree has been working diligently in talking to a number of different companies in the telecommunications and aviation area in terms of looking at wireless. We are waiting and the company has indicated that it will be some time in late September before they are in a position to put out a press release or get something done contractually,” says Middleton.
“They’re moving into the next stage, which is to start commercializing their product. That will be critical and that’s what we are waiting for.”
What was even more questionable was the fact that one day after that article and one day before Middleton issued the recommendation, Taurus sold 1,294,400 (45%) of the 2,868,500 shares that they sold into the rally during those five days. (See Taurus Trading History below) Another point worth noting is that after the recommendation was issued, Taurus continued to chip away at the share price of LAN as they sold all the way down to below $1.20 during September and October. In fact, any time that LAN appeared to show some strength by moving above the $1.20 level, Taurus was noticeably seen jumping in and selling it back down until it went below $1.20. (Note the Average/Share Price Sold below)
Taking a closer look at the details of today’s announcement further adds to the confusion of the events that have transpired over the past two months. The transaction announced today states that Taurus paid $436,000 to exercise compensation options for the purchase of 400,000 units of Plaintree. Each unit comprises one common share from the treasury of Plaintree and one-half of one common share purchase warrant. Each warrant entitles Taurus to acquire one common share from the treasury of Plaintree at a price of $2.00 per common share until June 30, 2001.
In other words, Taurus was willing to pay $1.09 per share today for LAN shares, after their analyst Middleton issued a $.50 target price on August 30,2000 ($436,000 / 400,000 Shares). Furthermore, assuming that they execute the special warrants carrying a $2.00 price, before the June 30, 2001 expiry date, it would place the average price per share from today’s transaction at $1.39 ($436,000 + $400,000 / 600,000 shares).
The only logical conclusion that can be made from today’s developments is that the $.50 target issued by Middleton in his report on August 30,2000 is no longer valid. Taurus’s management must have taken a closer look at Middleton’s analysis and after further evaluating Plaintree’s Fiberless Strategy and recent announcements, decided that paying $436,000.00 to exercise the compensation options, was a worthwhile investment. This is certainly a significant endorsement of Plaintree’s business strategy and quells any concerns that have been lingering as a result of Middleton’s questionable report.
Taurus Capital trading Activity – August 21 to October 25, 2000
Date Bought Av/Sh Sold Av/Sh Day Net Event
08/21/00 0 $0.00 3,000 $0.84 -3,000
08/23/00 0 $0.00 262,500 $1.00 -262,500 Rally Begins
08/24/00 10,000 $1.15 367,300 $1.27 -357,300
08/25/00 0 $0.00 546,300 $1.48 -546,300
08/28/00 0 $0.00 408,000 $1.89 -408,000
08/29/00 0 $0.00 1,294,400 $1.75 -1,294,400 CANADA-iNVEST.COM Article
08/30/00 0 $0.00 88,000 $1.36 -88,000 Middleton Recommendation Issued
08/31/00 0 $0.00 206,200 $1.42 -206,200 Watson responds on Stockhouse
09/01/00 0 $0.00 3,000 $1.37 -3,000
09/05/00 0 $0.00 102,000 $1.40 -102,000
09/06/00 0 $0.00 2,000 $1.45 -2,000
09/07/00 0 $0.00 18,000 $1.36 -18,000
09/08/00 0 $0.00 102,000 $1.27 -102,000
09/11/00 0 $0.00 70,400 $1.28 -70,400
09/12/00 0 $0.00 20,000 $1.29 -20,000
09/14/00 0 $0.00 38,000 $1.20 -38,000
09/15/00 0 $0.00 4,000 $1.17 -4,000
09/18/00 0 $0.00 1,000 $1.16 -1,000
09/19/00 0 $0.00 1,000 $1.20 -1,000
09/20/00 0 $0.00 1,000 $1.18 -1,000
09/21/00 0 $0.00 1,000 $1.18 -1,000
09/22/00 0 $0.00 1,000 $1.11 -1,000
09/25/00 0 $0.00 1,000 $1.13 -1,000
09/27/00 0 $0.00 2,000 $1.06 -2,000
09/28/00 0 $0.00 1,000 $1.10 -1,000
09/29/00 0 $0.00 81,000 $1.19 -81,000
10/02/00 0 $0.00 91,600 $1.20 -91,600
10/03/00 0 $0.00 1,000 $1.10 -1,000
10/11/00 0 $0.00 49,000 $1.20 -49,000
10/12/00 0 $0.00 5,000 $1.20 -5,000
10/17/00 0 $0.00 300 $1.03 -300
10/23/00 0 $0.00 39,300 $1.07 -39,300
10/24/00 0 $0.00 2,000 $1.06 -2,000
10/25/00 0 $0.00 2,000 $1.04 -2,000 Taurus Exercises $436,000 of LAN Options |
