Briefing.com's writeup on CCSI
CHROMATICS COLOR SCIENCES (CCSI) 6 1/2 -2 5/16. Professional
short-sellers are a vicious bunch: they grab, hold, kick, and bite in an attempt to frighten
longs out of their positions. When working the media, they suggest to reporters that a
company is cooking the books. Online, the typical scare tactic is a rumor that the CEO
is being investigated by the SEC. In the trading pits, the earnings warning is the rumor of
choice. Then, there is Manuel Asensio, the head of professional short-selling outfit
Asensio & Company, Inc. When he comes after a company, there is no mincing of
words. There is no insinuation that the company is dealing under the table. No, Mr.
Asensio will flat out call a company's executives crooked. In this particular case he goes
two steps further, calling CCSI a worthless stock that has been manipulated in a
collusive way among CCSI owners, its advisers and, most recently, at two Dreyfus
mutual funds that invested "unconscionable amounts in CCSI stock that has contributed
to huge losses in the funds." (Told you, the guy doesn't mince words). His initiation of
the stock with both a "strong sell" and "strong short" rating has dragged CCSI shares
down 25% today on 15 times average daily volume. CCSI shares have spiraled 50%
lower over the past week. The Asenio report claims that not only have CCSI and
related parties manipulated the stock, but that the company's only product has no sales
or licensing potential. According to Asenio, Colormate III, a color measurement system
claimed to detect jaundice in infants, is actually over 10 years old and that the product
has not logged a sale since winning FDA marketing approval almost a year ago.
(Chromatics Color notes that it is currently engaged in late stage negotiations with
potential manufacturing and distribution partners). We must admit that we are not that
familiar with CCSI. As far as Mr. Asenio is concerned, we know that his research has
made investors heady returns in the past. But even if he turns out to be correct about
this company, there is still no guarantee that investors will not get caught in a
short-squeeze instigated by professional daytraders who care absolutely nothing about
the company's fundamentals, just that the stock is heavily shorted and could fly under
the right conditions. |
