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(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
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 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
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.
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
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
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.
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.
Traurig, LLP, Santa Monica, Calif.
Kirkland, Esq., 310/586-7738
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