Wow, I actually agree with Mary on this one (that is, the JNOT story being a potential pump).
While it sounds interesting on the surface (in terms of devising a method for putting the squeeze on offshore naked shorting, assuming it really exists), I have my doubts about whether the degree of naked shorting in JNOT is anything close to what is suggested in that story (it seems highly implausible, and there is no way to confirm it as true) -- and JNOT's price collapse has everything to do with having an unprofitable business model in a market sector dependent on internet advertising for revenue, which is just about the kiss of death, than it does extrinsic factors such as shorting. If it plays out that way, great (justice is served), but it sure looks like a way to pump an otherwise nearly dead stock, rather than a legitimate "short squeeze play". That is an entirely "superficial" analysis, and just opinion, as always.
ASTN's situation is very different. Their connection to JNOT was ended months ago -- if memory serves, ASTN bought out TK's minority interest in UTTC (which was desirable to ASTN for balance sheet purposes) in exchange for transferring their nearly worthless stock in JNOT to TK. And Jameson now shows in SEC filings as being long 6.8 Million shares of ASTN. If ASTN succeeds in consummating its so-called strategic financing, ASTN may well recapitalize -- but it will be in the context of the strategic alliance, not to bring about an off-shore stock squeeze, IMO. And they may well put a lid (lock-out) on the RGC, Jameson and Kingsway positions (where they agree not to sell any of their formidable holdings in ASTN for some defined time period) as part of that deal (if I were an investor looking to put in $20+ Million, I would certainly insist on that as a condition) -- but again, the recapitalization would be to accommodate the new investor, not to engineer an off-shore short squeeze (again, IMO), and they might be able to achieve the lock-out without a recapitilization..
In my view, it's about whether they complete a strategic alliance and reverse the dynamic created in part by the failures of performance over the past 2 years, and in part by the immediate lack of funds which creates such an immediate financial risk (and thus buy time for the original model, which was to gradually build liquidity into profitability, as modified by the new partner's additions to the company, to succeed). If they do not succeed in consummating the so-called strategic alliance, I for one do not believe that they can somehow engineer an extrinsic situation like an "offshore short squeeze" to bail themselves out of the hole they are in now. IMO, virtually everything is riding on this "strategic alliance" -- I happen to take the recent SEC filings, the relatively positive recent stock price (which, right now, is several multiples of the low achieved only 2 months ago) and the complete silence emanating from Phillie as positive signs, and I absolutely think that whatever it is, it is coming to a head -- with as little cash as they must have, it has to be.
Good luck, either way!
MST |
