Having been on a downwards trend for the last six months, Merisel, Inc. (PINK:MSEL) literally resurrected yesterday regaining its dollar status. However, there is more to this spectacular surge than meets the eye.
Yesterday, MSEL gained a staggering 122% to its value closing trade at exactly $1.00 per share, which is a five-month high for the company. In terms of volume, MSEL was subject to increased investor interest as more than 69 thousand shares changed hands. The latter is not only a 52-week record for MSEL, but also 23 times higher than the daily average trading volume of approx. 3 thousand. Needless to say, penny stocks usually do not register such abrupt market moves unless there is a solid reason for that.
Guess what! There is an apparent explanation for MSEL’s notable surge yesterday. As seen on the 8-K form filed by MSEL on Dec. 28, the company’s major stockholder has now put forward a proposal in writing to buy out MSEL’s remaining O/S. The stockholder in question is a business which is organized as a limited partnership. Thus, if accepted, the transaction will provide MSEL with fresh capital. At the same time, however, the company will have to enter into a definitive merger agreement with the L.P., which makes its future on the stock market quite uncertain.
In case the transaction mentioned above becomes a reality, the L.P. will acquire MSEL with its:
- cash reserves of $1.5 million;
- $20 million of current assets, 65% of which currently exist as AR;
- $16 million of current liabilities;
- quarterly net loss of $1.8 million.
