At 11 am yesterday, the share price and the trading volume of Single Touch Systems, Inc. (OTC:SITO) spiked up all of a sudden. It is hardly a coincidence that the action happened simultaneously to appearance of the company’s latest press release on Yahoo Finance. 
SITO finished then the intensive session at $0.432, which represents a 44% jump from the previous close. The stock met strong resistance at $0.55, yet the jump in price and volume have been quite remarkable, given that SITO has suffered from a constant downtrend over the whole past year.
The action began when Single Touch Systems issued a press release yesterday, confirmed by an 8-K filing later in the evening. The news was that the company’s attorney has sent a Letter of Notification to Netflix, Inc. in which they declare the ownership of SITO of certain US patents and published patent applications directed to streaming and routing media.
It looks like SITO will now try to derive license fees from its technology, attempting to take its share from a billion dollar market. It is actually the second announcement of that kind this month. The first one came out on August 26, concerned another potential partner for SITO technology and produced a smaller effect on the market.
SITO latest financial report shows that as of end-June 2011 the company had total assets of $3.96 Million, while the liabilities were $763,000 in total. There is no more convertible debt to be seen on the balance sheet and the revenue from wireless applications has increased more than 8 times in the second quarter compared to the same period last year. Still, the market cap of almost $56 Million as of yesterday looks too high currently.
