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Elio:
I don't believe the MM's are short more than a million or so shares. Remember that volume is generally counted 2.5 times the trade on average for the OTC, so a million share day is really closer to 400K shares, a 250k day is more like 100k and so on. MM's can also circle a trade so that 10k shares look like 50k by bouncing them back and forth.
I do believe (no proof just a hunch) there is a large pool of employee shares that are coming off restriction. And then there are those converted shares for the acquisitions made almost a year ago. Even though the company converted preferred shares prior to the RS, they did not have to convert preferred to common shares. They could have simply converted preferred to debt instruments of some kind that are convertible to common. Depending on the way the instruments were worded the conversion might not have to be registered anywhere on a state or federal level. Those future shares could be sold against the box.
There are also the notes mentioned in the December 97 financial report. The holders may have converted to shares after the RS and if the company did convert the shares as a 504 then you have a large influx of shares. The wording of the notes could allow them to sidestep registration as long as a year has gone by.
My own guess is a total float, diluted for future conversions of acquisitions, employee shares, management shares -- because I believe that management has been funding the company and there is probably some kind of option deal involved -- and the notes mentioned in December 97 of about twenty million, with maybe three to four million free trading at the moment and with another two or three million free to trade in the next six to eight months. That seems to fit into the trading patterns. Its still a tight float, although its hardly optimal. This is my reasoning for staying with the stock anyway.
And remember that the launching of PMA means money is needed by the company. I would not be shocked to see them do a 504 in the near future. Its great that they are in the chains but they will need bucks to push the product.
My calculations, based on their releases of projections and some personal DD of existing sales of Window on Wall Street, Stock Shop and Microsoft Money, show a possible medium range revenue of about fourteen million over the next 18 months. If they even had a float of 60 million shares, and I like worst case thinking, with current low PEs the share price would still be about $3.25 and could be as high as around $7.00.
If the software sells the float doesn't really hurt the price. If it doesn't sell I don't think the float matters anyway since they'll be dead in the water. lol
Later
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