Bill Wexler, longtime follower of what he bluntly refers to as "the REFR stock fraud", is back with a new retrospective on the follies posted to the Yahoo! REFR message board.
By way of editorial comment, I should note that there really is not much remarkable about overly optimistic posts from the year 2000, particularly during the spring and summer, when the reality of the bear market hadn't really set in yet.
What is remarkable, though, is that even to this day, you see the same kind of talk, from mostly the same people (even as the aliases have changed over time), backed up by the same utter lack of results from the company. The only difference, really, is that the stock has not gotten crushed as badly in more recent years. Time will tell if the line can continue to hold long enough to the company to place the next round of shares at a useful price.
Anyway, with that as prologue, please join me at the summit as we ski down REFR Hubris Mountain. Take care though, it does hit double-diamond in spots...
"Buy REFR, it's the best buy on the market and has more potential than any other stock I know of..."
-- February 17, 2000. REFR closing price: $38 5/8 (all-time high close)
"I just wish REFR would pull back one more time (maybe mid 20's?) so I can pick up another few thousand shares. Then it's off to the outer-banks for unlimited Coronas and hot crab balls..."
-- February 22, 2000. Closing price: $37
"I'm going to buy waterfront in the islands with all the money I'm gonna make on REFR..."
-- March 28, 2000. Closing price: $34 1/2
"There are not a whole hell of a lot of customer sell orders out there, people are holding..."
-- March 30, 2000. Closing price: $31 1/2
"I think we bagged the elephant..."
-- March 31, 2000. Closing price: $29 1/2
"This stock is headed to the moon soon..."
-- April 7, 2000. Closing price: $27 3/4
"There are no shares for sale - you are a dead duck..."
-- July 28, 2000. Closing price: $25 1/16
"There are no shares for sale - you are a dead duck..."
-- August 2, 2000. Closing price: $23 1/16
"Recent scale up by emulsion suppliers, advanced commercialization by licensees and hiring of new employees to handle new licensee applications all points to this occurring. That is why longs are not selling..."
-- August 15, 2000. Closing price: $22
"I bought 1000 additional shares this morning...I have been accumulating since 1998...The company has never looked better or more grossly undervalued..."
-- August 21, 2001. Closing price: $20.80
"NO ONE is selling! Too many GOOD things happening with licensees..."
-- January 7, 2002. Closing price: $19.00
"Why the Shorts will lose a lot of money..."
-- February 22, 2002. Closing price: $17.30
"SHORTS PANIC!!!"
-- April 8, 2002. Closing price: $16.80
"Shorts Defeated Again..."
-- May 15, 2002. Closing price: $15.29
"The LONGS aren't selling!!!"
-- June 1, 2002. Closing price: $13.81
"There's no fundamental reason to sell. SPD products are still coming out..."
-- July 9, 2002. Closing price: $12.50
"But if I were a trader where do I see the biggest gain? LONG!"
-- August 22, 2002. Closing price: $11.35
"Asensio and his CONSPIRATORS are going to be here until LONGS decide to sell.
...and THAT doesn't look like ANYTIME BELOW $50 a share!!!"
-- August 23, 2002. Closing price: $10.35
"LONGS ARE FEEEEEEEELING THEIR POWER!!!"
-- September 9, 2002. Closing price: $9.60
"YOU are TRAPPED IN REFR, because YOU CAN'T get LONGS to sell!!!"
-- January 10, 2003. Closing price: $8.60
"Where are the promised windows? What kind of stupid question is that?"
-- January 31, 2003. Closing price: $7.34
"REFR SHORTS FAIL TO GET LONGS TO SELL!!"
-- February 28, 2003. Closing price: $6.70
"Longs are BUYING, NOT SELLING!!!"
-- March 19, 2003. Closing price: $5.66
And now a lengthy coast to the lodge and the present day, where we see...
The price going down represents to us just one more (maybe the last) opportunity to own one of the great technologies of all time at a bargain price.
-- January 26, 2006. Closing price: $4.99
Do tell.
Sunday, January 29, 2006
Sunday, January 22, 2006
Kooks and Kabura
Ostensibly, it has been a dormant start to 2006 for our favorite patent licensing company. No new licensees, no public announcements, and still no word on when the big-name licensees would be ready to produce second-generation SPD film in quantity.
But you would not know this from reading the Yahoo! REFR message board.
The titter all this month on that board has been over a description of the 2006 Mazda Kabura concept car which included the statement, "Overhead portions of the glass have adjustable tinting so that the driver can twist a knob on bright days to change the roof’s opacity, as desired, from clear to completely opaque."
Well our favorite investors put two and two together and -- news flash! -- decided that the adjustable tinting material in question must be SPD. Never mind small details such as the windows being reported as going "completely opaque", a characteristic never ascribed to SPD.
Eventually, however, it was confirmed that the material in question was in fact SPD. And when I say "confirmed", I mean that an anonymous alias posted a message asserting, without evidence, that it was confirmed. Meanwhile, someone posted an article from the British Channel 4 website which asserted that the Kabura's roof was in fact "electrochromatic". This all led to an amusing discussion over the distinction between "electrochromic" and "electrochromatic", whether those terms were inclusive or exclusive of SPD, and which of them was the proper expansion of the shorthand "EC". Needless to say, nothing was resolved on any of those scores.
What we do know is this: neither Mazda nor REFR nor any source outside of the message boards has ever once mentioned any relationship between SPD and the Kabura. Mind you, all of those can and have been rationalized away: Mazda is being secretive (about an auto show display?!), REFR may be contractually barred from publicizing (people are on to them!), and the press is lazy (somehow it became their job to do REFR's publicity for them).
But by this time it's a moot point. By the time you read this, the Detroit International Auto Show will have closed. Any press release at this point asserting that the adjustable tint material was in fact SPD will be completely after the fact and therefore ineffective for publicity purposes.
Worse still, such a release would call to mind the Jeep Rescue debacle from the 2004 Detroit auto show. It would mean that twice in a span of two years, an auto company was so underwhelmed by SPD in practice that they deliberately avoided reference to it even
though it was in plain sight. The last time that happened, the major supplier of film shut down a few months later.
Frankly, were I a REFR shareholder, I'd rather forget the whole thing.
But you would not know this from reading the Yahoo! REFR message board.
The titter all this month on that board has been over a description of the 2006 Mazda Kabura concept car which included the statement, "Overhead portions of the glass have adjustable tinting so that the driver can twist a knob on bright days to change the roof’s opacity, as desired, from clear to completely opaque."
Well our favorite investors put two and two together and -- news flash! -- decided that the adjustable tinting material in question must be SPD. Never mind small details such as the windows being reported as going "completely opaque", a characteristic never ascribed to SPD.
Eventually, however, it was confirmed that the material in question was in fact SPD. And when I say "confirmed", I mean that an anonymous alias posted a message asserting, without evidence, that it was confirmed. Meanwhile, someone posted an article from the British Channel 4 website which asserted that the Kabura's roof was in fact "electrochromatic". This all led to an amusing discussion over the distinction between "electrochromic" and "electrochromatic", whether those terms were inclusive or exclusive of SPD, and which of them was the proper expansion of the shorthand "EC". Needless to say, nothing was resolved on any of those scores.
What we do know is this: neither Mazda nor REFR nor any source outside of the message boards has ever once mentioned any relationship between SPD and the Kabura. Mind you, all of those can and have been rationalized away: Mazda is being secretive (about an auto show display?!), REFR may be contractually barred from publicizing (people are on to them!), and the press is lazy (somehow it became their job to do REFR's publicity for them).
But by this time it's a moot point. By the time you read this, the Detroit International Auto Show will have closed. Any press release at this point asserting that the adjustable tint material was in fact SPD will be completely after the fact and therefore ineffective for publicity purposes.
Worse still, such a release would call to mind the Jeep Rescue debacle from the 2004 Detroit auto show. It would mean that twice in a span of two years, an auto company was so underwhelmed by SPD in practice that they deliberately avoided reference to it even
though it was in plain sight. The last time that happened, the major supplier of film shut down a few months later.
Frankly, were I a REFR shareholder, I'd rather forget the whole thing.
Monday, January 02, 2006
New Year's scorecard review
2005 proved to be an active year for REFR after (by REFR's standards), as progress was arguably made towards no less than two of the twelve items on the REFR announcement scorecard. "Plans" were announced by Isoclima to introduce film into the market, in conjunction with their demo display at an Italian glass show in early October. Then, soon thereafter, details came to light regarding a church construction project in Arkansas, which, as things stand, is currently slated to incorporate SPD window shading. Whether that actually comes off as planned remains to be seen, and then there's the question of what qualifies as a "major" architectural project. Since there has been no announcement as such, we can't really give them a "yes" on that one yet anyway, but it is something that may be showing up in the coming weeks.
On the downside, the jumbo jet announcement looks dead, and the marine and automotive markets look very distant. And of course, as things stand, the money is scheduled to run out just about one year from right now, so more share dilution is on the way, assuming they can find someone to front for them for the next round. But that's the fun of this: even with a company as predictably unproductive as this one, there's still so much that manages to remain shrouded in mystery. Let's watch and see what 2006 brings to Woodbury. shall we?
On the downside, the jumbo jet announcement looks dead, and the marine and automotive markets look very distant. And of course, as things stand, the money is scheduled to run out just about one year from right now, so more share dilution is on the way, assuming they can find someone to front for them for the next round. But that's the fun of this: even with a company as predictably unproductive as this one, there's still so much that manages to remain shrouded in mystery. Let's watch and see what 2006 brings to Woodbury. shall we?
Thursday, December 15, 2005
Boeing Boeing Gone... this time for good
The mystery of the Boeing 787 dimmable windows is over. The funny thing is, everybody was wrong. But it is the shareholders of REFR that wind up with coal in their stock(ings), as ever.
Neither Jamco, nor the University of Washington, nor REFR will be seeing their product take flight on the windows of the Dreamliner. Rather, PPG Aerospace has been selected to provide the windows, much as they have provided windows for prior incarnations of the 7x7 aircraft series.
No doubt, supporters of REFR are working on some way in which REFR might somehow get in on the action, but, given that PPG surely has demonstrated the technology they will use, and that they are most definitely not one of REFR's licensees, it appears that this avenue of promotion for REFR is once and for all time closed.
Neither Jamco, nor the University of Washington, nor REFR will be seeing their product take flight on the windows of the Dreamliner. Rather, PPG Aerospace has been selected to provide the windows, much as they have provided windows for prior incarnations of the 7x7 aircraft series.
No doubt, supporters of REFR are working on some way in which REFR might somehow get in on the action, but, given that PPG surely has demonstrated the technology they will use, and that they are most definitely not one of REFR's licensees, it appears that this avenue of promotion for REFR is once and for all time closed.
Sunday, November 27, 2005
Reaching new pinnacles
I know I haven't been here to update in a while, but frankly, there hasn't been a whole heck of a lot going on with REFR lately, despite what the recent surge in its share price to near $7 might suggest. There is one development of some interest, though, involving REFR's latest effort at a pilot project for SPD.
The Church at Pinnacle Hills of Rogers, Arkansas, up in the Ozarks of northwestern Arkansas, is in the process of building a grand new worship center. It's a pretty big deal in that region, and very much a 21st century project. There are even webcams that allow you to view the progress of construction.
REFR's interest in this project is revealed through contractor Brawner and Associates. The large window facing the main worship center is expected to have "smart glass" in order to control the level of light. An article (PDF) included on Brawner's website goes on to state that technology used in the "smart glass" will be SPD.
Assuming nothing changes (and naturally, the message board mavens are assuming exactly that), it will be a nice feather in REFR's cap. Relatively speaking, of course. In the bigger picture, needless to say, they remain a public company dealing in terms of individual, one-shot projects, which, any way you cut it, is far from a truly desirable state of affairs.
Still, it will be interesting to watch and see how this develops. Will SPD remain the technology of choice for this project? Will film of adequate quality be available? Will the price tag be reasonable? Will REFR step in to make it reasonable? So many questions for a company so reticent in providing answers. But maybe we'll get them this time.
The Church at Pinnacle Hills of Rogers, Arkansas, up in the Ozarks of northwestern Arkansas, is in the process of building a grand new worship center. It's a pretty big deal in that region, and very much a 21st century project. There are even webcams that allow you to view the progress of construction.
REFR's interest in this project is revealed through contractor Brawner and Associates. The large window facing the main worship center is expected to have "smart glass" in order to control the level of light. An article (PDF) included on Brawner's website goes on to state that technology used in the "smart glass" will be SPD.
Assuming nothing changes (and naturally, the message board mavens are assuming exactly that), it will be a nice feather in REFR's cap. Relatively speaking, of course. In the bigger picture, needless to say, they remain a public company dealing in terms of individual, one-shot projects, which, any way you cut it, is far from a truly desirable state of affairs.
Still, it will be interesting to watch and see how this develops. Will SPD remain the technology of choice for this project? Will film of adequate quality be available? Will the price tag be reasonable? Will REFR step in to make it reasonable? So many questions for a company so reticent in providing answers. But maybe we'll get them this time.
Thursday, October 27, 2005
All hail SPD (insert rest of company name here)!
In a sign that REFR is not yet willing to depart from its old reliable SOP, the company announced the signing up of a brand-new licensee. The new company, SPD Control Systems, is so far basically indistinguishable from every other REFR licensee whose name begins with "SPD".
SCSC's chairman and founder, Jay Moskowitz, does have the distinction of actually having a track record as a businessman. However, his most recent company, Wireless Marvels, appears to have gone nowhere after producing its only material product a combination golf ball/FM radio. (Not kidding.) His biggest success story, per his bio, appears to have been selling his RTS Wireless company for a healthy $111 million. Not too bad, but one has to keep in mind that valuation dates to 2000, when company values were just a wee bit inflated. Not to mention that the acquiring company, Aether Systems, went into a bit of a nosedive shortly thereafter, and has since abandoned the wireless sector entirely. (Yes, it is the same company, see Aether Holdings' Yahoo profile.)
All in all, Moskowitz seems to fit the profile of a prospective REFR licensee, as in, being willing to try just about anything once. With the kind of money he has in the bank, he can no doubt well afford to have whatever he puts into this come to nothing. If only the REFR investors who giddily bought up shares during the recent rally could say the same.
SCSC's chairman and founder, Jay Moskowitz, does have the distinction of actually having a track record as a businessman. However, his most recent company, Wireless Marvels, appears to have gone nowhere after producing its only material product a combination golf ball/FM radio. (Not kidding.) His biggest success story, per his bio, appears to have been selling his RTS Wireless company for a healthy $111 million. Not too bad, but one has to keep in mind that valuation dates to 2000, when company values were just a wee bit inflated. Not to mention that the acquiring company, Aether Systems, went into a bit of a nosedive shortly thereafter, and has since abandoned the wireless sector entirely. (Yes, it is the same company, see Aether Holdings' Yahoo profile.)
All in all, Moskowitz seems to fit the profile of a prospective REFR licensee, as in, being willing to try just about anything once. With the kind of money he has in the bank, he can no doubt well afford to have whatever he puts into this come to nothing. If only the REFR investors who giddily bought up shares during the recent rally could say the same.
Tuesday, October 11, 2005
Boeing, Boeing, gone
After literally years of demands from REFR promoters that any viable alternative to SPD that could be used in Boeing's Dreamliner's advertised smart window shading system, they have finally gotten what they "wanted" as the technology supplier for the 787 window shades has at long last stepped forward.
In the October newsletter of the University of Washington's college of engineering, it was announced that a chemical-reaction based technology called "redox switching" developed at the college's Center for Intelligent Materials and Systems was to be the active technology in the windows' ability to become gradually more transparent or opaque at the touch of a button.
While reaction from promoters is still pending as of this writing, it seems that this is the final proof that Inspectech and SPD are not going to be suppliers for the Boeing 787, despite the bulls' previous insistence that Boeing had no feasible alternative to use.
Perhaps most troubling of all to REFR shareholders: the developers of redox switching indicated ambitions far beyond the aeronautical sector in the UWash newsletter article. Dr. Minoru Taya, directory of the CIMS, indicated commercialization was likely to begin within a few months. That right there puts it right about level with the claimed progress of SPD, with the main difference being that Taya's group does not have a multiple-decade track record of miserably failing expectations.
(Update, 7:18PM: REFR bulls did come back with a pretty fair rejoinder, in that the UWash article does not appear to square with Klaus Brauer's earlier descriptions of where the 787's window technology had been used earlier. Regardless, this still appears to be quite unwelcome competition for the gang from Woodbury.)
In the October newsletter of the University of Washington's college of engineering, it was announced that a chemical-reaction based technology called "redox switching" developed at the college's Center for Intelligent Materials and Systems was to be the active technology in the windows' ability to become gradually more transparent or opaque at the touch of a button.
While reaction from promoters is still pending as of this writing, it seems that this is the final proof that Inspectech and SPD are not going to be suppliers for the Boeing 787, despite the bulls' previous insistence that Boeing had no feasible alternative to use.
Perhaps most troubling of all to REFR shareholders: the developers of redox switching indicated ambitions far beyond the aeronautical sector in the UWash newsletter article. Dr. Minoru Taya, directory of the CIMS, indicated commercialization was likely to begin within a few months. That right there puts it right about level with the claimed progress of SPD, with the main difference being that Taya's group does not have a multiple-decade track record of miserably failing expectations.
(Update, 7:18PM: REFR bulls did come back with a pretty fair rejoinder, in that the UWash article does not appear to square with Klaus Brauer's earlier descriptions of where the 787's window technology had been used earlier. Regardless, this still appears to be quite unwelcome competition for the gang from Woodbury.)
Friday, October 07, 2005
What the H?
(This post originally stated in error that Isoclima's Chromalite trademark was registered. It is in fact not, a trait common to many if not most or all trademarks related to SPD.)
A rather amusing sidelight has arisen from Monday's "blockbuster" Isoclima/REFR press release. In the main text of the release, Isoclima General Director Alberto Bertolini talked about REFR's SPD-Smart Glass, "which we market under the trademark ChromaLite(TM)." However, at the end of the press release, the disclaimer reads: "CromaLite(TM) is a trademark of Isoclima S.p.A."
Okay, you say, so somebody made a typo, so what. Admittedly, not a whole lot but... what is the correct spelling of Isoclima's trademark? If one went to the Isoclima website, one might come across their R&D page, which includes a picture of a "test on electrochromic CromaLite® glass". But if one looked up REFR's most recent 10-K, one would find in the licensee trademark list (about five screenfuls down) that Isoclima's trademark name is given as "ChromaLite".
Now, maybe it's just me, but if I had this product which was supposed to be busting into this brand-new, multi-billion-dollar market for switchable glass, I'd think I'd make sure I knew how to spell my product's name. It certainly does leave one to wonder just how much thought Isoclima is really putting behind this whole marketing campaign.
Regardless, as the Vitrium show closes and REFR stock slips back in the direction from whence it came, leaving behind a brand new group of bagholders in the hole on their purchases of this stock, the fact that the press release that triggered their purchases at $4.70 and above contained such a basic error simply adds the insult to the injury.
A rather amusing sidelight has arisen from Monday's "blockbuster" Isoclima/REFR press release. In the main text of the release, Isoclima General Director Alberto Bertolini talked about REFR's SPD-Smart Glass, "which we market under the trademark ChromaLite(TM)." However, at the end of the press release, the disclaimer reads: "CromaLite(TM) is a trademark of Isoclima S.p.A."
Okay, you say, so somebody made a typo, so what. Admittedly, not a whole lot but... what is the correct spelling of Isoclima's trademark? If one went to the Isoclima website, one might come across their R&D page, which includes a picture of a "test on electrochromic CromaLite® glass". But if one looked up REFR's most recent 10-K, one would find in the licensee trademark list (about five screenfuls down) that Isoclima's trademark name is given as "ChromaLite".
Now, maybe it's just me, but if I had this product which was supposed to be busting into this brand-new, multi-billion-dollar market for switchable glass, I'd think I'd make sure I knew how to spell my product's name. It certainly does leave one to wonder just how much thought Isoclima is really putting behind this whole marketing campaign.
Regardless, as the Vitrium show closes and REFR stock slips back in the direction from whence it came, leaving behind a brand new group of bagholders in the hole on their purchases of this stock, the fact that the press release that triggered their purchases at $4.70 and above contained such a basic error simply adds the insult to the injury.
Monday, October 03, 2005
The great debut
Good morning!
The Red Sox are in the playoffs, Bush has made a new Supreme Court nomination, but who cares about any of that because ISOCLIMA IS SHOWING GEN 2 SPD AT A TRADE SHOW IN MILAN!!!!!!!!!!!!!
At least that seems to be the proportion of reaction as REFR, in the $2's last week, soars over $5 (though perhaps only momentarily) this morning.
To be sure, there's some big-sounding talk in the release. Isoclima "plans" to introduce films more than four feet in width into the market. Isoclima is "working with" companies in the automotive industry. The film was "produced on large-scale equipment", though whether the equipment was actually used for large-scale production is another matter.
One thing shareholders can be legitimately heartened by is, at least REFR has not yet given up entirely. Now, whether this is a last gasp and last chance to get out, or REFR has more aces up its sleeve, remains to be seen.
One thing seems clear from the level at which the stock momentum washed out: at least one shareholder appears to be selling first and asking questions later.
Strap in. This may get good.
The Red Sox are in the playoffs, Bush has made a new Supreme Court nomination, but who cares about any of that because ISOCLIMA IS SHOWING GEN 2 SPD AT A TRADE SHOW IN MILAN!!!!!!!!!!!!!
At least that seems to be the proportion of reaction as REFR, in the $2's last week, soars over $5 (though perhaps only momentarily) this morning.
To be sure, there's some big-sounding talk in the release. Isoclima "plans" to introduce films more than four feet in width into the market. Isoclima is "working with" companies in the automotive industry. The film was "produced on large-scale equipment", though whether the equipment was actually used for large-scale production is another matter.
One thing shareholders can be legitimately heartened by is, at least REFR has not yet given up entirely. Now, whether this is a last gasp and last chance to get out, or REFR has more aces up its sleeve, remains to be seen.
One thing seems clear from the level at which the stock momentum washed out: at least one shareholder appears to be selling first and asking questions later.
Strap in. This may get good.
Wednesday, September 28, 2005
Thermo goes cold
Yes, I know I said I would discuss REFR's presentation at the Long Island Investor's Conference last week, but frankly, no one I've talked to has had anything to say about it, and I haven't gotten around to listening to it for myself. Whatever they said seems to have attracted some tepid interest based on the subsequent price action, but with Stark Investments sitting there taking whatever they can get for their mountain of shares, this thing is not going anywhere fast anyway.
But meanwhile, one of REFR's more infamous cohorts, Thermoview Industries, filed for Chapter 11 bankruptcy earlier this week. Thermoview was the architect of the "rollout" in 2002 into which REFR founder Bob Saxe sold a significant chunk of stock. To this day Thermoview carries a link to a page describing "AlterLite" windows based on SPD, but apparently sales from that miracle product weren't enough to turn the tide for the struggling home improvement company.
This, coupled with Infinitint (f/k/a Razor's Edge and SPD Technologies) appearing to have repackaged itself once again, this time as PrivaSee Glass, selling a decidedly non-SPD-based product, and the decline of the REFR "empire" is becoming more and more evident by the day.
But meanwhile, one of REFR's more infamous cohorts, Thermoview Industries, filed for Chapter 11 bankruptcy earlier this week. Thermoview was the architect of the "rollout" in 2002 into which REFR founder Bob Saxe sold a significant chunk of stock. To this day Thermoview carries a link to a page describing "AlterLite" windows based on SPD, but apparently sales from that miracle product weren't enough to turn the tide for the struggling home improvement company.
This, coupled with Infinitint (f/k/a Razor's Edge and SPD Technologies) appearing to have repackaged itself once again, this time as PrivaSee Glass, selling a decidedly non-SPD-based product, and the decline of the REFR "empire" is becoming more and more evident by the day.
Thursday, September 15, 2005
Get thee to the small cappery!
In a rather unexpectedly swift rendering of judgment, the NASD has denied REFR's appeal of its delisting from the Nasdaq National Market to the Nasdaq Small Cap exchange, less than four weeks after the company announced the filing of its appeal.
In past years, the delisting process would often take months. One possible explanation is that the NASD has suddenly gotten much more efficient. This is a little iffy, but strictly speaking, the NASD is not a governmental body, so it's just barely possible that they've allowed some efficiency improvements to creep into their system.
Regardless, there seems little scope for there to have been a great deal of deliberation over this appeal. Was it that REFR's case for continued listing was so weak that it got laughed out of the room? Or did they not even try to make a case, but rather simply filed an empty appeal as a naked attempt to stall for time. If the latter, it doesn't seem to have worked very well.
This comes at an inconvenient moment for REFR, what with their plans to make their pitch to the Long Island Investor's Conference next week. The distinction between National Market and Small Cap may be all but transparent these days, but it will still be one more embarassing issue, out of an extremely long string of them, Joe Harary may have to contend with. Assuming he even opens the floor to questions.
But at any rate, that's for next week. REFR has promised the whole thing will be recorded and kept for posterity's sake, so stay tuned. We may actually have something to talk about again!
In past years, the delisting process would often take months. One possible explanation is that the NASD has suddenly gotten much more efficient. This is a little iffy, but strictly speaking, the NASD is not a governmental body, so it's just barely possible that they've allowed some efficiency improvements to creep into their system.
Regardless, there seems little scope for there to have been a great deal of deliberation over this appeal. Was it that REFR's case for continued listing was so weak that it got laughed out of the room? Or did they not even try to make a case, but rather simply filed an empty appeal as a naked attempt to stall for time. If the latter, it doesn't seem to have worked very well.
This comes at an inconvenient moment for REFR, what with their plans to make their pitch to the Long Island Investor's Conference next week. The distinction between National Market and Small Cap may be all but transparent these days, but it will still be one more embarassing issue, out of an extremely long string of them, Joe Harary may have to contend with. Assuming he even opens the floor to questions.
But at any rate, that's for next week. REFR has promised the whole thing will be recorded and kept for posterity's sake, so stay tuned. We may actually have something to talk about again!
Thursday, August 11, 2005
R&DD
The latest REFR gambit being flogged on the boards stems from an article in the Billings (Mont.) Gazette regarding Volkswagen's research and development work on SPD shading in windows. The article references an experimental Touraeg... Torueag... Toerag... that new SUV model, with windows that can change from a clear state to a dark state yada yada yada we've heard all this before.
Oh, and someone found a video which mentions just about everything the VW research center is working on, including, if you sit through enough of it (I had to resist the urge to click the back button when the Segways showed up), the switchable windows.
Okay, first of all... Billings, Montana? As best as we can tell, this appears to be the only newspaper in the country to pick up this story. Can it be that the rest of the country has already been saturated with "first impressions" of SPD?
Secondly, this represents no advancement at all for SPD. The big Setra rollout that ultimately went nowhere for REFR and SPD Inc. is several steps down the road from where SPD is with Volkswagen. Even if this was destined to be SPD's long-awaited big breakthrough, it's several years and at least one significantly dilutive refinancing away from bearing fruit from REFR.
But none of this matters to the people that uncovered this little nugget. It's become clear that finding "something new" has become its own reward, and that actually evaluating the information is something best left to the pedants.
That is what passes for "due diligence" these days.
Oh, and someone found a video which mentions just about everything the VW research center is working on, including, if you sit through enough of it (I had to resist the urge to click the back button when the Segways showed up), the switchable windows.
Okay, first of all... Billings, Montana? As best as we can tell, this appears to be the only newspaper in the country to pick up this story. Can it be that the rest of the country has already been saturated with "first impressions" of SPD?
Secondly, this represents no advancement at all for SPD. The big Setra rollout that ultimately went nowhere for REFR and SPD Inc. is several steps down the road from where SPD is with Volkswagen. Even if this was destined to be SPD's long-awaited big breakthrough, it's several years and at least one significantly dilutive refinancing away from bearing fruit from REFR.
But none of this matters to the people that uncovered this little nugget. It's become clear that finding "something new" has become its own reward, and that actually evaluating the information is something best left to the pedants.
That is what passes for "due diligence" these days.
Wednesday, August 10, 2005
The receivables conundrum
My general disinterest in REFR's most recent quarterly report notwithstanding, one item of interest has come to light, even if it more of a curiosity than anything else.
For the first half of 2005, REFR has recorded revenue of $78,242. Over the same six months, REFR's accounts ("royalty") receivable has increased by $110,750. Now, for those not familiar with accounting practices, receivables are money the company has earned but not yet been paid. They are recorded as revenue, but are carried as a non-cash asset on the balance sheet.
But if receivables have increased by over $110,750, how is it that there isn't at least that much in revenues? Did REFR somehow have negative payments from its customers?
The answer appears to be in the "deferred revenues" line of the balance sheet. In the past six months, deferred revenues have jumped from $10,000 to $90,000. Deferred revenues are, in a way, the opposite of receivables, in that they represent money paid to REFR but not yet earned by the company. So, reducing the increase in receivables by the increase in deferred revenues, the increase in receivables drops to $30,750, which is at least within the realm of mathematical possibility.
Mind you, it is widely considered a red flag by company watchers when receivables increase faster than revenues. Of course, in REFR's case, revenues aren't increasing anyway. Besides, what is one more red flag among in a company with so many you'd think it was the Chinese embassy?
For the first half of 2005, REFR has recorded revenue of $78,242. Over the same six months, REFR's accounts ("royalty") receivable has increased by $110,750. Now, for those not familiar with accounting practices, receivables are money the company has earned but not yet been paid. They are recorded as revenue, but are carried as a non-cash asset on the balance sheet.
But if receivables have increased by over $110,750, how is it that there isn't at least that much in revenues? Did REFR somehow have negative payments from its customers?
The answer appears to be in the "deferred revenues" line of the balance sheet. In the past six months, deferred revenues have jumped from $10,000 to $90,000. Deferred revenues are, in a way, the opposite of receivables, in that they represent money paid to REFR but not yet earned by the company. So, reducing the increase in receivables by the increase in deferred revenues, the increase in receivables drops to $30,750, which is at least within the realm of mathematical possibility.
Mind you, it is widely considered a red flag by company watchers when receivables increase faster than revenues. Of course, in REFR's case, revenues aren't increasing anyway. Besides, what is one more red flag among in a company with so many you'd think it was the Chinese embassy?
Monday, August 08, 2005
Giving shareholders no quarter
With the release of second quarter results (via 10-Q, as per usual), REFR has given shareholders a good idea of just what it intends to do with the $5 million dollars it raised last February.
That is to say, they intend to continue their policy of collecting paychecks, as SPD technology collects dust, while making a handful of purchases of stock just to give the marks a cue to follow.
Second quarter revenues of $36,992 are down from the same quarter last year, while the net loss is lower due to a cut in "research and development" expenditures. But who cares. Bottom line, another million in cash was burned, give or take a hundred thousand, leaving them with a bit over five quarters' cash left (as of June 30th). Meaning, the proxy to increase the share authorization by another couple million (because just one million shares at this price level will be a waste of time) should show up just about any time now.
Really, the biggest accomplishment for the quarter was a 30% decline in the share price, to multi-year lows. And even then, the legwork on that was accomplished the quarter before (in the form of the issuing of the shares for the aforementioned fundraising).
Move along, there's nothing to see here.
That is to say, they intend to continue their policy of collecting paychecks, as SPD technology collects dust, while making a handful of purchases of stock just to give the marks a cue to follow.
Second quarter revenues of $36,992 are down from the same quarter last year, while the net loss is lower due to a cut in "research and development" expenditures. But who cares. Bottom line, another million in cash was burned, give or take a hundred thousand, leaving them with a bit over five quarters' cash left (as of June 30th). Meaning, the proxy to increase the share authorization by another couple million (because just one million shares at this price level will be a waste of time) should show up just about any time now.
Really, the biggest accomplishment for the quarter was a 30% decline in the share price, to multi-year lows. And even then, the legwork on that was accomplished the quarter before (in the form of the issuing of the shares for the aforementioned fundraising).
Move along, there's nothing to see here.
Monday, August 01, 2005
The Jamco Email
I have to hand it to the REFR promoters; they never stop trying. Last week one of them produced evidence which they say proves that JAMCO cannot possibly be behind the windows of the Boeing 787 Dreamliner.
The evidence comes in the form of an email exchange which went as follows:
But then, what does this mean for REFR? Good question. To answer that, you have to go back to the chain of reasoning the promoters are using.
To listen to the promoters' own arguments, the case that SPD is the technology of choice is not based on any positive evidence directly implicating REFR or, their (only?) licensee in the aeronautical industry, Inspectech, but rather the lack of evidence implicating anything else. No, seriously. The primary argument leading to the conclusion that SPD is Boeing's technology of choice begins with the question, "what other commercially available technology could it possibly be?" This is followed by a flat dismissal of the numerous answers to that question, and eventually winds up with a conclusion that SPD is Boeing's choice by default.
In effect, because it cannot at this time be proven that the Boeing 787 windows are something else, REFR longs are supposed to assume that they will be SPD.
One might think that another multi-year low this morning might jolt a few of them out of the complacency of that line of "reasoning". One would be wrong.
The evidence comes in the form of an email exchange which went as follows:
Dear Sir or Madam:Now, this email may or may not be valid, but then again, that sort of uncertainty can be laid upon nearly anything posted to the message boards. So for now, we'll give the poster the benefit of the doubt.
The specifications for the new Boeing 787 call for the passengers and crew to
adjust the transparency of the windows electronically.
Does Jamco manufacture a variable tinting window product for aircraft
that Boeing could use?
Thank you for your attention.
XXXXXX XXXXXXXXXX
------------------------------------------
Dear Sir,
First of all, we are sorry for late response.
In regards to the your inquiry, JAMCO does not have such product, which can be used
on window, in our current product.
With best regards,
Tsutomu Tadokoro
Manager, Marketing & Sales
JAMCO Corporation, Aircraft Interiors Company
But then, what does this mean for REFR? Good question. To answer that, you have to go back to the chain of reasoning the promoters are using.
To listen to the promoters' own arguments, the case that SPD is the technology of choice is not based on any positive evidence directly implicating REFR or, their (only?) licensee in the aeronautical industry, Inspectech, but rather the lack of evidence implicating anything else. No, seriously. The primary argument leading to the conclusion that SPD is Boeing's technology of choice begins with the question, "what other commercially available technology could it possibly be?" This is followed by a flat dismissal of the numerous answers to that question, and eventually winds up with a conclusion that SPD is Boeing's choice by default.
In effect, because it cannot at this time be proven that the Boeing 787 windows are something else, REFR longs are supposed to assume that they will be SPD.
One might think that another multi-year low this morning might jolt a few of them out of the complacency of that line of "reasoning". One would be wrong.
Friday, July 22, 2005
Time's up
Just felt like making a couple notes. Today is the 10th day before the August 4th deadline for REFR to avoid removal from the NASDAQ-NM to the NASDAQ-SC, so if REFR does not close at $3.62 or higher today, the delisting will go forward. Unless of course they'd like to waste time and effort (whose, exactly, is not clear) appealing the matter.
In other news, let's review the announcement scorecard. Well, at least it's low-maintenance.
Over on the message boards, scandal is hot and heavy as the promoters are demanding to know what the critics theorized about Lang and Inspectech and when they theorized it. The point being, I guess, is if they can catech them wrong enough times about details regarding Inspectech, that will suddenly transform Inspectech into an entity worthy of doing business with Boeing. Or something.
Hey, cut them some slack, it's not easy making a bullish case for this company anymore. Just think if they didn't have the Internet as a buffer and had to vocalize these opinions, and keep a straight face in the process!
In other news, let's review the announcement scorecard. Well, at least it's low-maintenance.
Over on the message boards, scandal is hot and heavy as the promoters are demanding to know what the critics theorized about Lang and Inspectech and when they theorized it. The point being, I guess, is if they can catech them wrong enough times about details regarding Inspectech, that will suddenly transform Inspectech into an entity worthy of doing business with Boeing. Or something.
Hey, cut them some slack, it's not easy making a bullish case for this company anymore. Just think if they didn't have the Internet as a buffer and had to vocalize these opinions, and keep a straight face in the process!
Monday, July 18, 2005
Getting testy
Even as REFR dips again towards $3.00 this morning, many longs remain confident. You might ask why, though if you're a regular reader of this blog you probably have a pretty good idea already.
Nevertheless, it's always "something", and in this case it's the "fact" that all they have to do get is through product testing, and then the licensees will announce film availability, and then products will become available, and then look out world. Or something like that.
Reports on the state of testing are secondhand at best, but the consensus is that while each of the production licensees is working on some sort of problem, no two licensees are experiencing the same problems.
The question is, is that a good thing for REFR, or a bad thing?
It's easy to think it could be good. After all, if no two licensees are having the same problems, then every problem is solved at every licensee but one. So, all that has to happen is to have the licensees get together and they'll easily have the solutions to all the problems between them.
But is it really that simple?
Talk to anyone who's ever worked in quality control, or anyone who's managed to stay awake through one of those training films on the topic of quality, and they'll emphatically answer that question "no".
To cover one obvious possibility, a fix for one problem has this tendency to cause other problems. If one licensee were to apply another licensee's "fix" for their problem, there's every reason to think that "fix" would cause the problems the other licensee was having.
But beyond that lies another annoying question. Why is it that no two licensees can replicate the same results? Are they not following the same process for producing film? Is there a fixed process for producing film? If not, why not? And furthermore, if not, how exactly are the licensees ever supposed to get on the "same page", when they're reading from different scripts, so to speak?
REFR likens its business model to that of Qualcomm, the company that owns the CDMA standard for cell phones. But Qualcomm got where they are today by actually spelling out that standard very specifically, and making sure anyone who licensed the technology followed the standard to the letter. There is no indication REFR is making any effort to do that at all, which, given their minimalist approach to the licensing model, should come as no surprise.
This is a recipe for chaos. Film that Hitachi produces may be entirely different from film that produced by Air Products, or DuPont, or Dainippon. And in the event any one of them hits upon a winning formula, are they going to be eager to share it with their competitors? Doubtful!
One promoter on the message boards is trying to get over the catchphrase, "I would not bet against Hitachi". (At least it's a step up from "Bang! Bang!" -- was this supposed to be investing or wrestling?) But by betting on Hitachi, are you also betting on Air Products, DuPont and Dainippon... or against them?
Besides which, I'll bet against anyone I damn well please, if I don't think they care about "winning".
Nevertheless, it's always "something", and in this case it's the "fact" that all they have to do get is through product testing, and then the licensees will announce film availability, and then products will become available, and then look out world. Or something like that.
Reports on the state of testing are secondhand at best, but the consensus is that while each of the production licensees is working on some sort of problem, no two licensees are experiencing the same problems.
The question is, is that a good thing for REFR, or a bad thing?
It's easy to think it could be good. After all, if no two licensees are having the same problems, then every problem is solved at every licensee but one. So, all that has to happen is to have the licensees get together and they'll easily have the solutions to all the problems between them.
But is it really that simple?
Talk to anyone who's ever worked in quality control, or anyone who's managed to stay awake through one of those training films on the topic of quality, and they'll emphatically answer that question "no".
To cover one obvious possibility, a fix for one problem has this tendency to cause other problems. If one licensee were to apply another licensee's "fix" for their problem, there's every reason to think that "fix" would cause the problems the other licensee was having.
But beyond that lies another annoying question. Why is it that no two licensees can replicate the same results? Are they not following the same process for producing film? Is there a fixed process for producing film? If not, why not? And furthermore, if not, how exactly are the licensees ever supposed to get on the "same page", when they're reading from different scripts, so to speak?
REFR likens its business model to that of Qualcomm, the company that owns the CDMA standard for cell phones. But Qualcomm got where they are today by actually spelling out that standard very specifically, and making sure anyone who licensed the technology followed the standard to the letter. There is no indication REFR is making any effort to do that at all, which, given their minimalist approach to the licensing model, should come as no surprise.
This is a recipe for chaos. Film that Hitachi produces may be entirely different from film that produced by Air Products, or DuPont, or Dainippon. And in the event any one of them hits upon a winning formula, are they going to be eager to share it with their competitors? Doubtful!
One promoter on the message boards is trying to get over the catchphrase, "I would not bet against Hitachi". (At least it's a step up from "Bang! Bang!" -- was this supposed to be investing or wrestling?) But by betting on Hitachi, are you also betting on Air Products, DuPont and Dainippon... or against them?
Besides which, I'll bet against anyone I damn well please, if I don't think they care about "winning".
Monday, July 11, 2005
A small problem
Short sellers in REFR got to see that magic word many of them have been waiting to see for years.
Yes, REFR has been delisted. Sort of. Technically, what has happened is that REFR has "phased down" from the Nasdaq National Market to the Nasdaq Small Cap Market.
(Editorial note: Actually, the notice of delisting was given today. Research Frontiers can avoid delisting by reaching a market cap in excess of $50 million, roughly $3.62 per share, for 10 consecutive trading days between now and August 4th. This probably explains in part today's uptrend in the stock.)
What does that mean? Well, as with so many other events related to REFR, it actually means very little in a substantive sense. REFR will remain REFR, and most people with positions in the company, long or short, will notice no direct changes in the way REFR trades.
One distinction that used to put some dread in the hearts of naive shareholders was the removal of the "bid test" for short sales. In other words, assuming that borrows were readily available, short sales could go off just as easily as any other sort of sales. Contrary to prevailing "wisdom", however, this omission did not open the floodgates for abusive short selling of small cap stocks.
However, that distinction has been removed with the implementation of Regulation SHO, so in fact there is no practical functional difference between the two markets.
Lack of substance notwithstanding, this event will no doubt be an irritation to fans of the stock. What it signifies is that REFR is roughly among the lowest sixth of market capitalizations among Nasdaq-listed companies. This is not necessarily a mantle of shame for new, small companies still on the ramp-up. For a company with two decades of history of public trading, however, it can be rather humiliating. If nothing else, it will be another negative factor for the inevitable next round of capital raising.
Promoters will doubtless downplay this development, and perhaps in a strict sense be right, but it's at least worth bringing up that REFR seemed to think it meant something when it first joined the National Market in 1997.
Apart from that, just another milestone on the road to blue oblivion.
Yes, REFR has been delisted. Sort of. Technically, what has happened is that REFR has "phased down" from the Nasdaq National Market to the Nasdaq Small Cap Market.
(Editorial note: Actually, the notice of delisting was given today. Research Frontiers can avoid delisting by reaching a market cap in excess of $50 million, roughly $3.62 per share, for 10 consecutive trading days between now and August 4th. This probably explains in part today's uptrend in the stock.)
What does that mean? Well, as with so many other events related to REFR, it actually means very little in a substantive sense. REFR will remain REFR, and most people with positions in the company, long or short, will notice no direct changes in the way REFR trades.
One distinction that used to put some dread in the hearts of naive shareholders was the removal of the "bid test" for short sales. In other words, assuming that borrows were readily available, short sales could go off just as easily as any other sort of sales. Contrary to prevailing "wisdom", however, this omission did not open the floodgates for abusive short selling of small cap stocks.
However, that distinction has been removed with the implementation of Regulation SHO, so in fact there is no practical functional difference between the two markets.
Lack of substance notwithstanding, this event will no doubt be an irritation to fans of the stock. What it signifies is that REFR is roughly among the lowest sixth of market capitalizations among Nasdaq-listed companies. This is not necessarily a mantle of shame for new, small companies still on the ramp-up. For a company with two decades of history of public trading, however, it can be rather humiliating. If nothing else, it will be another negative factor for the inevitable next round of capital raising.
Promoters will doubtless downplay this development, and perhaps in a strict sense be right, but it's at least worth bringing up that REFR seemed to think it meant something when it first joined the National Market in 1997.
Apart from that, just another milestone on the road to blue oblivion.
Friday, July 01, 2005
R-Class dismissed
Another door was quite firmly shut in REFR's face as Mercedes Benz announced the specifications for its new R-Class SUV/sedan hybrid. Originally known as the GST, for Grand Sports Tourer, their mention of a "panorama" roof, invoked memory of a similar term used by Daimler's Setra division, and led many to jump an automatic association of "panorama roof = SPD".
That assumption got it's answer today as Mercedes made its milestone announcement just weeks before production is slated to begin. The "panorama roof" is in, but no mention whatsoever is made of variable tinting. They do mention "privacy glass" on side and rear windows, but if there is one thing SPD is unambiguously not, it is privacy glass.
Of course, you won't find a promoter who will act like this matters one whit. All that matters is Hiatchi is working on production, and when they get there, VOOM!
And yes, I was trying to invoke the John Cleese rejoinder there.
Doubtless, they will come up with other tacks with which to keep flogging this horse, and when they do, I will be here to give them the coverage they richly deserve. However, today marks the end of the daily frequency of posts to this blog. New responsibilities figure to cut into the time I can devote to this journal, and in any event I feel the backstory of this strange, strange company has now been fairly told.
So with that, have a great Independence Day, and I'll be seeing you soon.
That assumption got it's answer today as Mercedes made its milestone announcement just weeks before production is slated to begin. The "panorama roof" is in, but no mention whatsoever is made of variable tinting. They do mention "privacy glass" on side and rear windows, but if there is one thing SPD is unambiguously not, it is privacy glass.
Of course, you won't find a promoter who will act like this matters one whit. All that matters is Hiatchi is working on production, and when they get there, VOOM!
And yes, I was trying to invoke the John Cleese rejoinder there.
Doubtless, they will come up with other tacks with which to keep flogging this horse, and when they do, I will be here to give them the coverage they richly deserve. However, today marks the end of the daily frequency of posts to this blog. New responsibilities figure to cut into the time I can devote to this journal, and in any event I feel the backstory of this strange, strange company has now been fairly told.
So with that, have a great Independence Day, and I'll be seeing you soon.
Thursday, June 30, 2005
Where'd the short interest go?
From mid 2001 through much of 2003, the short interest in REFR was a very large, albeit rather stable, two million shares. (For no apparent reason, promoters at the time chose to make up their own number, insisting that there was an additional half million "invisible" short interest. Today these same people will latch on to any excuse to declare the critics to be liars. Go figure.)
In theory, this represented a potential powderkeg for the shorts. If REFR were to suddenly achieve the success that had eluded them for decades, the wave of resulting buying from the short covering alone would lead to huge run-ups in the stock. But then again, we're talking REFR, so shorts were rightly unworried about that eventuality.
Nevertheless, the promoters were unperturbed that, as delay built upon delay, a golden opportunity to catch the shorts off-guard might be slipping away. Why? Because, they said, the short interest wasn't going anywhere. There was no way for the shorts to cover their positions.
It's unclear how they arrived at that conclusion, given that the claim was more sloganeering than debate. But whatever the thought process was, the shareholders were completely convinced. The shorts can't cover and that was all that needs to be said. If REFR took a month, or a year, or ten years to finally succeed, it wouldn't matter because the short interest would still be stuck where it was, waiting to be squeezed to infinity and beyond.
Today the short interest holds steady, at a bit less than one million shares.
Since we'll never get a mea culpa or other explanation from the promoters regarding how they wound up being so wrong about so many things (they're too busy asserting how they will eventually be proven right -- yeah, I know) it falls to the rest of us to piece together what happened.
Two major events appear to have made the difference. The first and easiest one was REFR's delisting from the Russell index. Index funds dumped over half a million shares, and while this weighed heavily on the stock, the stock never quite "broke". It was by and large an orderly decline, with trading volumes increasing nicely to accomodate the mandatory selling by the funds. Where were all these buyers coming from to cushion the fall? It was the short sellers, of course, capturing very nice profits from shares shorted from anywhere from $12 to more than $30.
But prior to that came a rather mysterious occurrence. During one relatively uneventful month, the short interest dropped by more than half a million shares between two reporting periods. There had been a small rise during the period in question, but one that soon fell back, and in any event there was hardly enough volume for that many shares to have been covered in the open market.
So what happened there? Apparently some entity or other had a very large "boxed" position, one hedged against a long position or something equivalent. In the most common cases, such hedging involves options, or shares of a company the shorted company is acquiring, but neither of those applies to REFR.
We may, in fact, never know exactly what happened, but some have strong suspicions. One involves REFR's financier of the time, Ailouros Ltd. While they were supposedly barred from shorting REFR stock in their agreement, it always felt odd that they seemingly had no problem with REFR continuously selling them shares even as they continued to fall. In a few cases, REFR was rather embarassingly found to have been buying the shares right back from Ailouros, at a loss to REFR. But it never seemed right that Ailouros would continue on as they had without some kind of ace in the hole. Could a short position of over half a million shares have been that ace?
Regardless, the shorts today are manifestly in superlative shape, with a relatively mild million shares to worry about covering, and with the stock hovering around 14-year lows. Those still long remain defiant, insisting that one day the shorts will get theirs.
From here, though, it looks like they already did.
In theory, this represented a potential powderkeg for the shorts. If REFR were to suddenly achieve the success that had eluded them for decades, the wave of resulting buying from the short covering alone would lead to huge run-ups in the stock. But then again, we're talking REFR, so shorts were rightly unworried about that eventuality.
Nevertheless, the promoters were unperturbed that, as delay built upon delay, a golden opportunity to catch the shorts off-guard might be slipping away. Why? Because, they said, the short interest wasn't going anywhere. There was no way for the shorts to cover their positions.
It's unclear how they arrived at that conclusion, given that the claim was more sloganeering than debate. But whatever the thought process was, the shareholders were completely convinced. The shorts can't cover and that was all that needs to be said. If REFR took a month, or a year, or ten years to finally succeed, it wouldn't matter because the short interest would still be stuck where it was, waiting to be squeezed to infinity and beyond.
Today the short interest holds steady, at a bit less than one million shares.
Since we'll never get a mea culpa or other explanation from the promoters regarding how they wound up being so wrong about so many things (they're too busy asserting how they will eventually be proven right -- yeah, I know) it falls to the rest of us to piece together what happened.
Two major events appear to have made the difference. The first and easiest one was REFR's delisting from the Russell index. Index funds dumped over half a million shares, and while this weighed heavily on the stock, the stock never quite "broke". It was by and large an orderly decline, with trading volumes increasing nicely to accomodate the mandatory selling by the funds. Where were all these buyers coming from to cushion the fall? It was the short sellers, of course, capturing very nice profits from shares shorted from anywhere from $12 to more than $30.
But prior to that came a rather mysterious occurrence. During one relatively uneventful month, the short interest dropped by more than half a million shares between two reporting periods. There had been a small rise during the period in question, but one that soon fell back, and in any event there was hardly enough volume for that many shares to have been covered in the open market.
So what happened there? Apparently some entity or other had a very large "boxed" position, one hedged against a long position or something equivalent. In the most common cases, such hedging involves options, or shares of a company the shorted company is acquiring, but neither of those applies to REFR.
We may, in fact, never know exactly what happened, but some have strong suspicions. One involves REFR's financier of the time, Ailouros Ltd. While they were supposedly barred from shorting REFR stock in their agreement, it always felt odd that they seemingly had no problem with REFR continuously selling them shares even as they continued to fall. In a few cases, REFR was rather embarassingly found to have been buying the shares right back from Ailouros, at a loss to REFR. But it never seemed right that Ailouros would continue on as they had without some kind of ace in the hole. Could a short position of over half a million shares have been that ace?
Regardless, the shorts today are manifestly in superlative shape, with a relatively mild million shares to worry about covering, and with the stock hovering around 14-year lows. Those still long remain defiant, insisting that one day the shorts will get theirs.
From here, though, it looks like they already did.
Subscribe to:
Posts (Atom)