MSEL shorts went from September 38,000+ to 48,000+ in October; signifying a change of stockholders' sentiment. Support was met and the stock seems to be on the rise slowly if overbought does not occur.
Fundamentally, the rumor is that they will close US operation and stick to Canadian operation. Debt is being reduced as we speak. Net B2B business can be conducted at any location; since they are closing call centers which they don't need anymore. Whatever business left must have been pushed onto the net.
However, the attempt to purchase VUSA assets of computers, software and bring their personnel, 40-50 strong, along, is not a visible attempt to close US operation. It is more like an attempt to change from B2B to B2B adding B2C as well. Whether they will get bankruptcy court approval or not, we are all waiting to see.
US operation by this time should have been stabilized in sales. It is still perhaps much larger than Canadian operation, observing the three remaining warehouses in the US.
Nibble at the market in small trades maybe be advisable at this time. Watch out for overbought which will turn on this fragile market. Risks remain very high but small holding can be rewarding. Greed to make a killing is not warranted since management has never proved to be reliable in the long term. |
