When the volume drops...IMO that would be a sign the conversion process (or at least the bulk of it) has come to an end. In meantime, Accent has (again) lost credibility in the investing community. Their November press release with respect to the securing of $4 million in financing from the sale of the convertible securities omitted the critical information that there was no floor for the conversion price. Maybe Accent did not realize at the time the seriousness of this omission, but I find that hard to believe. Unfortunately, this might be a consequence of being a struggling small company in the midst of a turnaround -- it couldn't quickly secure more favorable conditions for the raising of capital than it did.
I can't imagine though that the big money insiders who have invested considerable sums in the company and stayed with it are pleased with what has occurred. And this is my concern too. So many more shares of Accent are now held by a group that is not interested in the long term health of the company. This group operates in pursuit of its own economic advantage, like a parasite, without concern for the broader health of the company. The holder of the November convertibles succeeded in thrashing the stock to obtain the lowest conversion price possible. Now this group owns possibly 25% or more of Accent. I doubt the group plans on holding the shares for more than one year and will unload them whenever the share price rises substantially, consequently creating instability in Accent's recovery and undermining what little long term investor confidence possesses (see the press release below).
All that said, maybe this group will be as skilled allowing Accent to rise in share price as it was in destroying Accent's share price (yeah, I know extremely speculative on my part). I do believe that Accent will recover, though with significant upward and downward movement along the way, from what I believe are today's bottom level prices. (Certainly not all of Accent's fall is attributable to the convertibles -- other software companies have been badly hurt over the last month with end of the year tax selling and the fall in share prices throughout the technology sector.)
As a person on the Yahoo thread said, I hope Todd Oseth, Accent's President, is as good selling software as he is as bad raising capital. He more incentive than any of us for to Accent takeoff -- his options are worthless at today's prices.
The Buy, Sell, or Hold Company Drops Coverage of Accent
Software International
TAMPA, Fla., Dec. 22 /PRNewswire/ -- The following was released today by The Buy, Sell, or Hold
Company:
The Buy, Sell, or Hold Company has dropped research coverage of Accent Software International
(Nasdaq: ACNTF - news; $0.58) because of recent developments with the company.
The company (ACNTF) recently completed a convertible stock offering, which will further dilute the
outstanding shares as much as 4 million additional shares and reduce our earnings estimates
substantially in the future. There seem to be problems and a lack of support that have arisen with the
investment bankers used in the offering as well. Because of these and other concerns we no longer
recommend the purchase of the stock.
This report is for informational purposes only. This report is not an offer to sell or a solicitation of an
offer to buy any security. The information contained in this report has been obtained from sources
believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. Any
opinions expressed are subject to change without notice. The Buy, Sell, or Hold Company and/or its
associated individuals may, from time to time, own or have positions in the securities discussed herein.
The Buy, Sell, or Hold Company is a full service research company, headquartered in Tampa, FL. This
report is not to be reproduced without the expressed written consent of The Buy, Sell, or Hold
Company. Inquiries should be directed to: e-mail: matt@buysellorhold.com
SOURCE: The Buy, Sell, or Hold Company |
