Hi Richard,
This JAVA is a strange animal. I have been in and out of it and watching it closely since April when it was in the 12-cent range. Over the months there has been heavy selling into any kind of a rally. Usually the sells were of the 50,000 and 100,000 share variety with occasional sells of 250,000 shares. It is possible that this selling has been "naked" short selling but I have been more of the opinion that it is restricted shares that have been turned loose or, possibly, even the company dumping shares to raise capital.
Back on September 9th when we had that 4-million share day, there was a single sell order that crossed the tape for 2-million shares. Naked short sellers normally don't sell in those quantities which, again, leads me to believe the company had a hand in this dumping.
My concerns also extend to this new deal with Tri-Star. Basically, they did a reverse merger to gain access to a publically trading shell. At this point, we know nothing of the merger details. For instance, the articles of incorporation of this new company might have doubled or tripled the outstanding shares. For all we know they might have also done a reverse split since they can control all details of the company's stock. Finally, don't overlook the part of the announcement they said the coffee business will be spun off to the previous shareholders. That could leave the current shareholders with worthless paper if the trade to the previous management consisted of non-retricted shares. Dumping could happen immediately (or maybe it already has) and then the shares declared non-tradable. Lots and lots of loose ends to this one.
Bottom line: Be careful!
Al |
