Trading in TRNT on Friday closed on a significant block of 111,000
shares which crossed at 3:55PM on a slight uptick.
It appears that this was a trade between two institutional holders,
negotiated in advance of the actual transaction. There appears to
be no evidence of any "accumulation" prior to the transaction itself,
which indicates that the seller had assembled its position some time
earlier. Likewise, the sale was made at the asked price, which
seems to indicate a somewhat agressive buyer. The timing of the
trade, at the close of the market on Friday, indicates that neither the buyer nor the seller wanted this to create any excitement. Since this transaction accounts for around 2.2% of shares outstanding, it does not appear that this trade represents "insider selling".
Given these facts, it appears that this is probably a positive event.
- First, it may resolve a potential "overhang" which may have
been a significant element in the resistance that the stock
has encountered in the $3.25-3.50 area.
- It may also be further evidence that the market anticipates
strong results from TransNet's in upcoming quarters, and is
confident that these results will be realized.
- Given that its industry is undergoing fairly rapid
consolidation, this may also be the opening move in the
acquisition of the Company. It has been said that the major
hardware distributors and systems integrators will be
strongly motivated to develop stronger consulting
businesses as they encounter weakening margins in
hardware. TransNet, with its strong market presence in a
key corporate market, appears to be an ideal acquisition
candidate, and over the last several months I have heard
more than one rumor of its impending takeover.
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