Two true stories . . .
Three years ago this month, in May 1996, Comparator Systems (IDID) was a penny stock trading at $.03 per share. With about 1.2 billion shares outstanding, it had a market cap of about $36 million. Sort of the size of some of IDX's competitors, like NRID, SACM, DDSI or GDER, just with more dilution. Then one day word was passed on the Motley Fool chat board that Mastercard was going to be using IDID's technology in its credit cards. All hell broke loose. IDID broke the NASDAQ daily share volume record with 178 million shares traded. Over three days, there were 449 million shares traded. Comparator's price went from three cents a share to over $1.75 per share, and its market cap increased in three days by almost $2 billion. Of course, the story wasn't true; Mastercard had no connection to IDID, and, in fact, IDID was claiming stolen technology as its own to make its business seem credible. Not long afterwards, IDID was bankrupt and some of its officers were convicted of criminal charges. All that is left of the company now is its legend, a legal shell and, believe it or not, a thread on SI.
Yesterday, Mastercard announced that it was going to use Identicator technology in its new credit card/smart card system. IDX is in good financial shape, with a market cap yesterday of over $300 million. Identix did not issue a press release on this news. IDX closed at $11.125 yesterday and today, at the close of business on the AMEX, was unchanged at $11.125, for an increase in its market cap of $0. |
