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April 26, 2001
Volume IV, Issue 37
Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:
 

NetSol International (NASDAQ: NTWK)- Reopens For Trading After Halt

In this past weekend's edition we gave an honorable mention to NetSol International, our all time favorite stock as it was our biggest historical winner. Read the Testimonial Section at our home page for some idea of how good this stock was to us in the last Bull Market.

Coming off an extreme low of less than $1 just three weeks ago, the stock has been on a tear recently, closing at $5.27 yesterday.

The stock was halted for trading this morning pending a significant news release, which helps explain the recent surge in the price of the stock. Today's news release covers a 13D filing with the SEC.

NetSol Shareholders Group, LLC has been formed by a consortium of concerned shareholders with the intent of pursuing the following as stated in the press release: 

"Options under consideration include replacing some or all of the current Board of Directors and executive officers of NetSol with a new management team, merging with or being acquired by another corporation, and attracting additional shareholders, business partners or other investors for purposes of generating additional financing to acquire control of the company."

The OTC Journal believes what you are seeing is the first step in the process of a hostile takeover of this company. Management's corporate performance over the past two quarters is best described as pathetic, and it is clear large shareholders are not prepared to simply take their losses and move on. Today's move leads us to believe this is the first step in a series of events which will take the company in a new direction which may conflict with the wishes of the current board, but is likely in the best interest of shareholders.

As we are writing this edition, the stock has reopened for trading in the $4.50 range, down $.77 from yesterday's close on very light volume. Clearly this news was already priced into the stock, and buyers over the last several weeks are not running for the exits. This implies this news may be the first step in a series of events being engineered by disgruntled shareholders to move the company in the right direction.

Although we have no knowledge of any pending news, don't be surprised to see more come shortly on the heels of today's events. Clearly NetSol Shareholders Group, LLC would not have been formed and filed a 13D without some sort of a game plan for the company.

The absence of sell side volume today leads us to believe investors close to the company recognize today's events are the first step in a series of moves which could take the stock much higher. 

Weakness in the price on light volume could end up representing a great entry level for investors with high risk tolerance. On trailing fundamentals the stock is overvalued in our opinion. However, stocks generally trade on investor perception of the future, and today's move clearly bodes well for shareholder value.

NetSol Shareholders Group, LLC probably has a well thought out plan for the future of this company. Because of our ongoing coverage of the situation we will bring you the news as it unfolds. It will be an interesting learning experience to watch events. We have never watched a hostile takeover of a small company.
 

Trading Alerts

We were hoping to find one or two trading alerts in large cap names this week. Sometimes the market does not cooperate. If we rebound to 2200 we may come out with one or two Trading Alerts on the short side. Conversely, if the market pulls back into the 1920 area, we will be looking for a couple of ideas on the long side. This week has been a tug of war between the Bulls and the Bears, which has so far been a stand off.

Here is the complete text of the NetSol news release for your review:
 

Thursday April 26, 9:25 am Eastern Time
Press Release

Shareholders of NetSol International, Inc. Form NetSol Shareholders Group, LLC to Explore Available Options to Maximize Shareholder Value

LAS VEGAS--(BUSINESS WIRE)--April 26, 2001--A group of shareholders holding over 25% of the outstanding shares of NetSol International, Inc. (Nasdaq:NTWK - news) today announced that they are not satisfied with current management of the company, and have formed NetSol Shareholders Group, LLC for the purpose of exploring available options. Options under consideration include replacing some or all of the current Board of Directors and executive officers of NetSol with a new management team, merging with or being acquired by another corporation, and attracting additional shareholders, business partners or other investors for purposes of generating additional financing to acquire control of the company. 

The shareholders, including Blue Water Partners which holds over 21% of the outstanding shares, Dr. Henry Vogel, who owns approximately 6% and PSM International Limited which owns approximately 1%, have filed a Schedule 13D with the Securities and Exchange Commission describing the members of the shareholder group and their intended course of action. 

Forward-Looking Statements 

This press release contains predictions, estimates and other forward-looking statements which include, but are not limited to, statements regarding the likelihood and timing of the closing. These statements are subject to risks and uncertainties and actual results may differ materially from any future performance suggested above. The parties issuing the release undertake no obligation to publicly release any revisions to these forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 

--------------------------------------------------------------------------------
Contact: 

     For NetSol International, Inc.:
     Greenberg Traurig, LLP, Santa Monica, Calif.
     John C. Kirkland, Esq., 310/586-7738
     kirklandj@gtlaw.com
 



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