Paul:
The late trades were as follows:
16:41 $2 3/4 3,000
16:41 $2 3/4 3,000
16:40 $2 3/4 4,000
16:40 $2 11/16 2,000
16:31 $1 27/31 230,000
16:26 $1 7/8 4,000
The 230,000 order seems to have gotton filled at prices from 1 1/2 to
1 27/32. Earlier during the day:
11:12 $2 17/32 500
11:11 $2 9/16 456,500
11:01 $2 1/2 1,000
11:01 $2 1/2 5,000
It seems the 456,500 was a buy order.
Thus, although the closing price as of 4:00 ET is 1 7/8, the
after-hour close is 2 3/4.
What if:
* The insiders buy enough shares to give to the convertible preferred
stockholders, after the earliest date for conversion (Dec 15), enough
shares acquired at an average cost of say $2.5.
* CTYS makes an announcement that a majority of shareholders have
approved of stock repurchase at the market to meet the conversion
requirement and they do not expect any dilution!
* Share price climbs to $10 before Dec 15 and convertible preferred
stockholders get 7.5 mil shares (if they choose to convert) that CTYS
acquired at a cost of 2.5 x 7.5 = $18.75 million towards the $75 mill
of preferred stock money they received.
* Every shareholder hanging on smiles.
* Who are the losers? Those who sold their stock and got churned and
burned in the market!!!
The above is very feasible. If I know CTYS is fundamentally OK and I
work for Bear Stearns, I will follow this. The other alternative is
that CTYS is ready to go to Chapter 11 which has a small probability.
Remember: Convertible Preferred Stockholders do not seem to have shorted given that the short interest has not gone up much as of Oct 24.
Sankar |
