zaxbowow, let me get this straight.
The stock fell from a most recent intraday high around 30 after they received notification from NASDAQ re: tangible assets. OR perhaps more specifically after they buried it in an SEC filing following the appearance of their new President on CNBC in which he failed to mention the notification.
And their first line of defense in meeting the requirements appears to be...
To date during the fiscal quarter ending Dec. 31, 1998, the company has received approximately $2,883,000 of additional equity from the exercise of employee stock options.
Exercise of employee stock options.
It seems self-evident that those options were profitable.
On Dec. 15, 1998, under the company's 1997 stock incentive plan, the board of directors granted Kives a stock option to purchase 200,000 shares of the company's common stock at an exercise price of $11.1875 per share, the then fair market value of such shares. Kives has committed to exercise the option in its entirety by Dec. 31, 1998, to enable the company to satisfy the Nasdaq net tangible assets requirement.
"A stock option" transaction between the Company and an insiderwhich a reasonable individual would conclude is likely to almost guarantee a profit. In fact, after one trading session following the announcement, based on yesterday's close the stock is 15.64% above the "strike". Also quite profitable.
Anyone seeing a pattern developing here?
Now, there's nothing wrong with profits. That's how capitalism works.
It's just that the way I understand capitalism, those profits should be based on more than press releases.
In the long run "press release capitalism" IMHO is unlikely to replace the general model of: ideas>capital>products>profits.
After taking into account the option exercises during the quarter ending Dec. 31, 1998, including the anticipated exercise by Kives of the 200,000-share option, and the currently expected net loss of approximately $1 million for the quarter ending Dec. 31, 1998, the net tangible assets of the company are expected to exceed Nasdaq's minimum net tangible assets requirement for continued listing on the Nasdaq National Market System.
If the NASDAQ's minimum net tangible assets requirement can be met in this fashion, what's the point of even having them?
Good trading,
Tom |
