To all:
Close observation of a chart on SQSI shows that there was a lot of support
for the stock after the public offering in December 1996 where the stock
had a steady and moderately well behaved climb from around $5 to $8. This
can be attributed, to some extent, to the interest taken in the stock by
some investment bankers in New York along with a the lack of SQSI news
releases and SEC filings where the clients of the investment banker kept
buying up the stock but the general individual market participant seemed to
be kept in the dark as to what was going on at the company.
During early June the company announced the commencing of the acquisition
of a competitor, suspected to be a Canadian outfit, which was to have been
completed by early August. Around late June the investment banker's
support appeared to dry up and/or market makers and possibly some
individual investors, appeared to begin to short the stock. Anyway,
somehow an over supply of stock seemed to became available. Also, there is
the possibility that the investment banker could have started to sell some
stock or decided not to, or just did not have deep enough pockets to,
continue to support the stock while at the same time the SQSI management
made no attempt to release any news about how well the company was doing
until the first week of September.
SQSI was not able to complete the acquisition on time and with no
announcements being made by SQSI until early September, the stock has
retreated to the $2 - $2.5 level. Now all of a sudden we are seeing
a number of good SQSI news releases which indicate that their business is
going gang busters. It has become very apparent that SQSI is not dealing
with anticipation as to the worth of their product but rather, with the
realization of the worth of their product. Over the past week SQSI appears
to have turned out to be more of an investment rather than a speculation.
The bottom line here is that there appears to be a possibility for a near
term short squeeze that will be hard to play as an individual and that
could result in the stock going from grossly undervalued to grossly
overvalued. Since this apparently inevitable stock manipulation seems to
be in store for SQSI it could become very volatile in the near term.
However, in the long term, because of there hardware and software leasing
approach to doing business, SQSI could become a cash cow - especially so if
there niche market can become international and include Europe and Canada. |
