Al: Everyone expected Quantum to respond. Here is a replay of the bad article they published a few weeks ago. This was released today which in turn caused the stock to take a small dip. It has since recovered.
There is plenty of support for LOCK @ 4.1. It will most likely weather this little storm that Quantum has launched. Remember, they have to cover their shorts. :-) Here is todays scare:
Saf T Lok -3: Quantum Notes Stk Sales By Co. Insiders >LOCK
Quantum asserts that Saf T Lok, in part, has sought to lift its share price so that insiders at the company could bail out of their positions at lofty levels. In it press release, the firm said CEO Gardner recently sold 200,000 shares of Saf T Lok, while several other insiders sold tens of thousands of additional shares.
Gardner counters that the proceeds of the stock sales represented the only compensation that some of the insiders received last year, and he noted that even after the sale, he continues to hold 477,000 shares.
"Last year was a key year for this company. The team put a lot of hard work into it," Gardner says. "A lot of people who sold shares took no salary for the year or any other compensation. All of us are quite dedicated to the company. All of them still own a significant amount of shares."
Quantum alleged that Saf T Lok, in another effort to boost its share price, fabricated a roughly $550,000 order for one of its products, called Grip Lock.
In its press release, Quantum belittled the agreement, saying that United Safety Action Inc., that company that entered the pact with Saf T Lok, had little experience in the firearms industry and little marketing muscle. In an interview later, Quantum's Ehlers asserted that he believes the agreement itself was phony.
Arthur Braun, owner of United Safety Action, in an interview, confirmed that he has little experience in selling gun-related wares. But he and his lawyer, Edward Burnbaum, of Lynch Rowin Novack Burnbaum & Crystal in New York,
defended the contract.
"If it's a front, I don't know why we spent weeks negotiating the deal,"
Burnbaum said.
Meanwhile, on-line investors jumped on the United Safety Action story. Braun asserts that even before Quantum issued its press release, he received a telephone call from someone who identified himself as a newswire reporter.Braun says he later found an account of his conversation in a posting on a Yahoo message board.
- Carrie Lee; 212-416-4750
(END) DOW JONES NEWS 02-19-98
11:18 021998
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