Antbody want to comment on what this means for ASTN?
I reprint it as I found it......
1-29-2002 Dr. John Faessel ON THE MARKET
212-713-5793 onthemar@yahoo.com
Here’s a SHORT SQUEEZE story that has relevance all over this page.
JagNote’s! The stock, would you believe? (JNOT) OTCBB $0.46
First the disclaimer. I have been a Jag Commentator for about 9 years and I just recently bought stock in the company. It’s a bronco but listen up.
As you probably know the Jags have been around for years and are the Wall Street rag par excellence. Kind of the cream del la cream or the daily generated market news and information with brokerage upgrades / downgrades, sector commentary, distilled news from the big media and some really good analyst types, me included. They also had a terrific live streaming online market presentation called Jagfn that shut down last year due to the woes and the reverberations from the Market crash of 2000 / 01.
This one is a mouth full, and beyond the parameters of the available space but here goes. Around 25 million shares fully diluted. Available float is 14 million. Short around 55 Million. Not a misprint. Trades about 700,000 shares a day. Yesterday traded 2.46 million, up 15 cents. (See news below)
Of note: (JNOT) CEO Gary Valinoti, recently bought 1 Million shares and now owns about 5 Million shares. www.jagnotes.com
Back in time, (August 2000) (JNOT) did a toxic convertible debenture.
A deadly death spiral with all the resets where the stock gets shorted down to oblivion. Hope you understand how that works as the full explanation is beyond the pale for the average investor but no matter, read on. Net, net, there is a monster growing naked short position and the stock is breaking out, but get this…. The convert was part of the deal in the ‘selling’ of the subsidiary Jagfn back in Jan. 2001. So it’s not there any more.. Also, just recently JNOT got a first of a kind SEC approval for a recapitalization with new shares for the old shares. This leaves the shorts bare ass, holding no borrowed shares, only the hope of a very unlikely Jag BK. So the short is shorting against all the shares that are bought, around 700,000 a day. This goes on thru foreign banks domiciled in places like the Isles of Man and east Bejesus. It now costs the shorts about $550,000.00 for every penny up tick in share appreciation in margin calls. At this point I think shorts are short about 40 million un borrowed shares.
How does this play out? On Feb 21 comes the vote on the recapitalization.
Then all shares will ‘tendered’ and new A & B shares issued. At which time the shorts are supposed to physically produce / tender their ‘borrowed’ shares ‘that they don’t have.’ They hold only thin air and need to buy real shares to tender or they get nothing. There are not enough shares that exist for them to buy.
** The scalding hot news is that yesterday investment bank Thomson Kernaghan & Co. Ltd., (the big JNOT short and former owner of the old convert) just folded its tents. Chaos reigns. The scraps of TK will be merged into Research Capital Corporation. Canada’s Financial Post’s Derek DeCloet wrote on the demise of TK. He said “Meanwhile, a private hedge fund run by Mark Valentine, TK's cocksure chairman, was besieged by investors who wanted to get their money out. The fund plunged in value after the tech crash, but was so illiquid that Mr. Valentine could meet only a fraction of the redemption requests. (The hedge fund, too, was being sued because of convertible debentures.)”
Major clearing agents, market makers and banks look to be on the hook for megabucks. The play out will be a barn burner.
How high does it go? With a Breakout chart, and a great short squeeze that seems to be just underway, higher and higher is the call. Speaking of calls, call 911 for Mr. Valentine or maybe the coroner. |
