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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (14887)	3/31/2005 8:30:07 AM
From: RockyBalboa	Read Replies (2) \| Respond to of 19428

NEXR, BHLL Burned once burned twice: NEXAR: Stock in Trading Frenzy ------------------------------- The Worcester Telegram & Gazette reports on March 12, 1999 that the stock of Nexar Technologies Corp is worthless. It has no inherent value. However, that message followed a wild four days during which more than 4 million shares of the all-but-dead company changed hands. Even so, Nexar shares rose, ending the trading session at 9.5 cents per share, up 2.5 cents for the day on a volume of 493,700 shares. Nexar officials said the trading binge may have been the result of a misconception by investors that the company's Wednesday announcement that it had finalized a previously announced deal to sell its patents and trademarks to ATEC Group Inc. of Hauppage, N.Y., was good news for shareholders. Good for shareholders of ATEC perhaps, said E. Craig Conrad, Nexar's former vice president of marketing, but no help to holders of Nexar stock. "A lot of investors have been calling who are a little bit confused because of the transaction, thinking that they might get some ATEC stock for their shares of Nexar," Conrad said. "Such is not the case." The truth is Nexar stock has little, if any, intrinsic value, said Dodi B. Zirkle, vice president of Continental Capital and Equity Corp., a Florida-based financial public relations firm. "At some point the rumor mill took over and there was a misconception about what Nexar's sale of assets meant," said Zirkle. "Somehow people assumed the company was being acquired." "It wasn't that kind of acquisition," said Conrad. "It's important that investors realize that the core assets of the company have been purchased by ATEC and that the court will liquidate any other remaining assets to the benefit of the creditors. "The stockholders would come in after the creditors have been paid 100 percent of what they are owed. It's unlikely they will get anything." Nexar filed for bankruptcy protection against its creditors Dec. 17, acknowledging debts of $4.5 million and assets of $3.3 million. The company, which produced computers employing Nexar's patented design to make PC upgrades easy, went public in April 1997 at $9 per share. Nexar turned in $32 million in sales in 1997, but ran into cash flow problems in 1998. Its stock was delisted from the Nasdaq Stock Market in December, but has continued trading on the Over-the-Counter Bulletin Board. The volume swell in Nexar stock began Monday, when nearly 790,000 shares changed hands and the per-share price rose to 6 cents from a little less than 4 cents. On Tuesday - the day before the announcement of the asset sale to ATEC - the stock more than tripled to 19 cents per share on a volume of 2.6 million shares before falling back to 7 cents a share Wednesday. Conrad said the sudden volatility in Nexar's share price may have been fueled in part by speculators who rapidly trade in and out of penny stocks in the hopes of quick gains. That combined with the misconceptions about the meaning of Nexar's asset sale to ATEC could have caused the volume surge, he said. "Once a stock is trading at 10 cents a share, it's a whole different type of investor mentality down there," said Conrad. "There's a whole lot of talk and wishful thinking. It becomes highly speculative, and people come in and trade it up and then sell. It's called pump and dump." Without speaking specifically about Nexar, Grant David Ward, assistant district administrator for the Securities and Exchange Commission in Boston, said the SEC has the power to halt trading in a stock if it discovers there is incorrect information about the company in the marketplace. But the fact that people may misinterpret news about a company or wild trading in response to news doesn't signify anything in and of itself, he said. "Anyone who called was told very clearly that stock trading in Nexar now is somewhat of a risky proposition," said Conrad. "It doesn't make sense that there would be speculation about our sale to ATEC. It was already public information that those assets were being sold."