Heres the deal and I am calling it as I see it. I have been lamenting the short position in the stock for the last thirty days not understanding what was going on. But after the registration by the Castle Creek Partners who have pulled the biggest con on our company since its inception the die is cast and it is clear. Under the terms of the registration, it is clear that Castle Creek is rewarded for pounding the stock down because when they convert on August 2nd they will get more shares. In addition because of their 10% discount which amounts to paying them 20% interest on the $5 million dollars provided in February, they come out like bandits. Desperate men do desperate things and it appears that our management made a totally dumb move in giving this deal to Castle Creek. In addition, they got a bonus warrants to purchase 750,000 of our company stock at bargain prices for the next three years.
That being said the one thing i fear in the next two weeks is long panic if the stock breaks down at $2.00. It is easy to say hold your fire it is going to get better but when the rats desert the ship who wants to hold the bag.
Another thing that Castle Creek did was to register the potential sale of 6,000,000 shares of company stock at $2.53. If they expect to sell the stock they will be owning after August 2nd, they will not let the stock lanquish at $2 after August 2nd.. If the longs understand this, there will be no reason to sell if the stock hits $2. As fast as they sold the stock short to get more when they converted, they will run it up to be able to sell it at $2.53.
Once the Castle Creek group has sold their 6,000,000 on the secondary offering, the stock should have clear sailing on the up side and on this point I totally agree with Ariella. It is going to take a lot of baseem to hold your ground the next two weeks, but that long shareholders who do so will come out fine.
Calling it as I see it, I remain, a strong supporter if not an anxious one until we get rid of the crap.
Regards,
Robert M. Silver |
