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Pastimes : JAVA - Short squeeze
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To: HRAKA who wrote (94)10/4/1997 12:48:00 PM
From: Richard Mazzarella   of 157
 
Hraka, <<what all this reverse split talk is and is/ has it occured.>> JAVA was at its maximum authorized shares at 20MM. A reverse split would allow the company to raise additional capital by selling shares within its authorization. They claim that they need the capital to expand the business. Any funding and dilution that increase the value of the company (book value or earnings) doesn't hurt shareholders even though there is dilution. However, the company has now also expanded the authorized shares to 40MM which doesn't seem necessary if there is a reverse split. Maybe the company just wants the options. No, the reverse split has not occurred yet.

Note! I have been thinking more on this stock and see that there is now a real possibility of the SHORT SQUEEZE. The merger and spin-off of the coffee company gives the company an excuse to call in all it's stock for exchange. If the MMs have illegally shorted, they could lose their butts covering. If I was engineering this play, I would get the short squeeze going and then raise cash on selling shares at a higher price. If Tri-Star is earning money, the stock price would adjust to the P/E. The company may not then need to reverse split. If the stock has been illegally shorted, the stock could run up close to its all time high for awhile, maybe more. Will this happen? It all depends on if there is illegal shorting and if Tri-Star is a real income producing operation. The potential here is excellent while the downside minimal at these prices IMO.
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