It’ finally time to revisit GEPT.  This has been a huge win for OTC Journal twice- last December from $2.75 to $6 in a few weeks, and this past July from $3.25 to $8 thanks to CNBC’s Cramer.

I knew the huge run up from Cramer’s recommendation wouldn’t hold- after all it was not a fundmental event. I also viewed  the company’s failure to complete the AstroPhysics acquisition a major negative.

The company has also come under some criticism for making a mistake on issuing some consultants warrants- after reading the news, I came to believe it was much ado about nothing- more of a clerical error than anything.

The stock has swooned dramatically once again as all the hot money seems to be coming out. However, looking at the trendline going back to this June, the stock has found its way all the way back to that line and might find some support here.

I have done a little research on this recent swoon, and believe I have found the explanation. If you look at the SEC filings, you will note a series of S-3/a filings in the last couple of days.

Based on experience, I believe an S3 registration statement went effective. This means 2.8 million shares, priced at $2.80 just became free trading on the 13th.

In light of the fact that over the last five trading days the stock has traded about 2 million shares and dropped about 35%, one can easily make the leap that these shares have either found their way into the market already, or the stock is being shorted against those shares.

At any rate, I believe now is the time to revisit GEPT. The Cramer effect, which I know put money in a lot of subscribers pockets, has ended. The company has a lot of new business. The stock is very oversold.  $3.75 is a good level to revisit GEPT. Buy when they are quiet and no one wants them- sell when they are all buying.