All: I posted my last note right before todays collapse through recent support at .81 cents. We traded as low as .72 cents with volume in excess of 1.3 million shares. As I mentioned earlier, the short group has been very pro-active of late and have been leaning on the stock. Our old friends at NITE, RKEL, DATK, JOSE, FAHN, ALEX, MHMY, are the firms who have been in cahoots on this stock and are determined to drive it lower.
I talked to a couple of different people as to why they are attacking the stock. Some answers.....
First, with the obvious dilution card that is currently being played, these guys have no problem shorting, spreading innuendo, manipulating a stock that has no friends in the market. By breaking this recent support, they can induce frustated shareholders into selling as they feel that the "little guys" will throw in the towel and move onto greener pastures. Meanwhile the company makes ANOTHER positive fundamental announcement today yet the stock is off 15%. ISGI/TWT now OWNS 10 switches that gives the company coverage of 80% of the US population. Should the stock have traded lower on this positive news?
Second, a recent Fed Filing on 8/26 - 8/28 was noted as some Rule 144 Insider stock has been registered to sell totaling approximately 500K shares. I called the company and inquired about this and was told that this Filing was from a group that use to work for the company. They were a part of the old Real Estate division. Opinion...this does not concern me as anyone holding stock for 2 years has the right to register their stock. They are also former employees and are not a part of current ISGI/TWT management. Registering stock does not necessarily mean that they are going to sell. This is still a NEGATIVE though as the shorts can construe "insider selling" and use this as a excuse to drop bids and attack the stock. Also this gives the impression of insiders dumping in the midst of good news and the price under a buck. Definitely not good timing but supposively comes from some ex-employees. Bad timing is all this seems to be, yet something the shorts can use to their advantage.
Third, it appears the party could be just about over for these guys. No refuting the fact of Paine Webber's presence. Though they were not active today, this is a positive no matter how you slice it. MM's can make money on the stock on the way down AND on the way up. IF they can get you to sell them cheap stock on depressed bids, AND make .09 - .12 cents on the day, they position themselves for the move North. With PWJC coming on the box, could ISGI be poised for their introduction to some real Investment Banks and the stock being taken away from the day trade/short scum?
So what are ISGI shareholders to do? I have thought about this long and hard. I am as frustrated as all of you at the constant releasing of good news yet no price appreciation. The stock continues to be manipulated with BIG volume days and endless supply crossing the tape. Why won't the stock appreciate? Is there any answers? IMO there is...... a reverse split.
Some of you might be saying, "Flint your nuts". But hear me out before you jump to any conclusions. I agree most reverses don't work, but in this case I believe this one would. After watching this stock being manipulated for months on end, the company has to take the "play" out of the equation. The "play" is the perceived HUGE float. The HUGE amount of shares allows this group of adversarial MM's the opportunity to control the stock with a nice margin of error. They can never get caught no matter how large the volume because they can always out short or manipulate retail buying. Once retail buying dries up. They attack bids and down she comes. I have witnessed this with ISGI for the past year.
Also the depressed price of the stock precludes most BIG IB's from coming into the stock as it is to risky and can cause complience problems for the established IB's. Large houses DO NOT make markets in risky "penny stocks".(This is why PWJC appearence is interesting as you cannot find another stock under a dollar that they make a market in.) Thus the shorts and day traders forever control the movement of the stock. They will NEVER let it go because it is a HUGE cash cow for these slime balls and real market forces ie suply demand will never apply to this stock in its current state. A reverse split will close up the float, allow the large houses to come into the stock, and we all can have a nice day.
I have talked to 2 different associates who have told the TWT story to 2 large IB's who specialize in Telecom. Both love the story, but can't get involved because ISGI is a "penny stock". My question is this? How are we ever going to get out of being a "penny stock" when the MM's that currently control this stock won't allow us to break out of this trading range. Today is a perfact example. GREAT news yet off 15%. You have to be kidding me! I want to jump through my Level II as I watch this thing trade!
Thus the only answer IMO is a reverse. Get the stock trading above $5.00 and bring in some real Investment Banks to support the company. Do the numbers that you are talking about ($100 mill+) and take this stock away from these guys. Where would this stock trade doing a $100 million plus in revenue and were profitable with a small float and real IB's? I bet you much higher than we are now.
In closing, if the company has not already thought of this I believe I will bring it to there attention. I see no other way of breaking out of this vicious circle we are now in. Do you? We cannot attract the quality of IB that we need while we trade at current levele yet the current MM makeup will not allow the stock out of their slimy grasp. Truly a double edged sword. If ISGI is projecting .15 EPS on 75 mill fully diluted, wouldn't this be $1.50 per share on 7.5 million shares. 23 million in the float to 2.3 million. Remember Diana Corp, $3.00 to $120.00 with a small float and very little shares outstanding. They do not have 1/10th the story as TWT. A minimum 25PE would be warranted and that would be $37.50 per share or $3.75 pre-split. IMO it would be easier to reach these numbers with a smaller float, new Investment Banks, and less manipulation probabilities if we did a reverse. This would work with a new Investment Banking partner and a company that is doing the numbers that they say they are going to do. That simple. I am sick and tired of doing battle with no odds of winning. It seems like we are playing against a stacked deck. Well if we "adjust" the deck maybe the cheaters can be beat at their own game. Comments?
John
PS: I tried to fix my E-mail, thanks Tom B. Will someone try to send me a note to see if it works? Thanks.... |
