SPKL continues its pattern of trading very poorly on increased volume, and I’m getting a lot of emails with basically two questions- 1. Is there something wrong with the company?, and 2. Is it time to buy yet?
Those of you who have really been following this story know that I am uniquely intimate with this company. In fact, I was instrumental in helping them in the process of choosing to go public, and a lot of the pre public shareholders are personal acquaintances of mine.
Therefore, I can state with a great deal of certainty there has been no fundamental derailment at the company. In fact, just the opposite is true, the company is accelerating on every front- franchise sales, company owned store growth, and real estate acquisition. The only weakness of late has been the vacuum of new store openings in the last three months- This was simple a cycle issue, and new store openings will start to pick up again later this month.
However, the stock has been under pressure of late, and I am choosing to step back and see how low it wants to go. In my view, SPKL has become a victim of the new SEC regs related to shortening up the time frame for 144 filings. It used to be that investors had to hold shares for a year under Rule 144 before they were eligible to become free trading. As of February 15th, the time frame has been shortened to 6 months.
There have been a rash of filings of late, and I believe the recent weakness in the stock is related. I am monitoring the volume as it related to the filings, and will notify everyone when I believe the selling is about done.
In the interim, here’s a look at the current chart:
As you can see, the gap I have been looking for filled on Friday. As such the stock is close to being in position to turn back up. Almost there, but not quite. I would suggest giving it a few more days to a week.
Comments, questions, and in this case, complaints are welcome.