Flipping the CALL and IRYS Pancake

Flipping the Pancake

Two of my 2012 calls have gone insane this week to the good and the bad, and it’s time to turn the pancake over on both of them. Magic Jack (NASDAQ: CALL), which has been a monster win, is offering us another opportunity to make money in my view. More below.

Recently introduced iTrackr Systems (OTC BB: IRYS), has been a absolute mess and I believe has been targeted by market makers who are aggressively shorting the stock. The stock might have now sold off enough to be good enough for a bounce, and that’s the other side of the pancake.

Here’s a review:

iTrackr (IRSY) Under Attack

My recent idea on IRYS looked pretty darn good out of the gates- having made a short term move from my $.68 entry level to about $.85- a quick gain of about 25% in the first two trading days. Yesterday, however, was a different story.

While I was making an appearance as the guest host on the Big Biz Show (www.bigbizshow.com- btw- sorry the online broadcast got screwed up- it should be working now)- the stock got absolutely annihilated.

To me, this looks like a classic manipulated short raid on the stock by market makers. You simply don’t see stocks trade like this for no reason.

Actually, in my view, there were some reasons behind this little penny stock getting tagged with the short seller bulls eye- there was some content published on the company from other sources that was highly inflammatory in my view, and brought poor little IRYS squarely into the short cross hairs.

The stock has traded an incredible amount of volume since making it’s debut last week. There are only about 8 million shares in the public float. The stock has traded 8.8 million shares since last Wednesday- there’s no way every single share in the public float has changed hands.

A quick look at the chart tells the whole story. Stocks don’t drop like that with no news. The two day drop is insane.

The stock may have made its bottom today. There was mid morning news that seemed to turn the tide, and it’s an endorsement of the company’s potential from a really strong investor.

About mid morning IRYS disclosed it has received an executed term sheet from Cornucopia Fund- managed by Omar Amanat. According to the news, Mr. Amanat is the co-founding board member of Twilight Studio as well as Summit Entertainment’s largest shareholder; Peak Group Holdings. He provided and raised 50% of the capital during Peak’s $1 Billion financing of Summit Entertainment. Recently Summit was sold to Lions Gate Entertainment Corp. (NYSE: LGFNews) for $412 Million.

Summit Entertainment owned Twilight Studio- the studio of the Twilight Movie Series Franchise. Just Google Omar Amanat – you will see this guy is one big hitter. The fund executed a term sheet which allows them to invest up to $1 million in IRYS at a fixed price of $.40. It was not disclosed how much has been invested so far. The shares the fund is purchasing will not be free trading for 6 months.

The stock is regaining some ground since this news came out. Perhaps short sellers are rethinking their view on this company after the indirect endorsement of one of the most astute investors and successful businessmen around.

In the meantime, my SSL, as published on the home page, for IRYS was $.60. If you’re out, you might want to consider coming back in. This could be a “V” shaped bottom if short sellers decide to start covering.

This one could be good for a bounce. I haven’t seen one attacked like this in sometime, so it’s a little strange, but could be a tremendous opportunity.

BTW- Full disclosure-I’m still long every single share I had when I published on IRYS last week. I have my own money at risk. I have not been paid anything by the company.

Magic Jack (NASDAQ: CALL) – Let’s Have Another Look

CALL has just gone nuts, rolling through $20 without much problem as settling in around $23. Fantastic move, and I hope everyone clipped 400% off the call options I recommended.

It might be time to either buy a put, sell or call, or short this stock. Next Monday the company comes out with the 2011 year end audit numbers after the market closes.

Now, I have no idea how good the earnings will be, but here’s what I do know.

95% of the time, when a stock makes a big run into earnings, it blips up briefly after the release, then sells off as the hot money comes out on the news.

I see no reason why that pattern wouldn’t repeat itself here.

Tomorrow I’ll have a specific recommendation for a trade on a post earnings pullback.

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