A horrible symmetry

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Tomorrow, Thursday, August 15th, 2013, is most likely the day that MER Telemanagement Solutions, a company that I have followed extensively (go here for the latest posting,) releases it results for the second quarter of fiscal year 2013.

Monday, August 12th, 2013, Unitek Global Services, another company that I have followed extensively (go here for the latest posting) released its 10-K for 2012, including a significant amount of restatement for preceding periods.

I wont get into the details of what is going on with Unitek Global Services (read the earlier postings!,) except to say that the company has been going through some interesting times and is now emerging from a very dark cave that it was put into courtesy of fraud in one of its divisions and trigger-happy investors. The important point is that, in my opinion, the restatement in the 10-K was far less radical than it could have been, and, so, I had no issue with it (in fact, not only did I have no issue with the restatement, but I discovered a diamond-in-the-
rough in the 10-K filing, which I plan to excavate, polish, and exhibit in a blog posting in the near future.)

Regardless of the absence of bad news — and possibly stimulated by an overall down market-days, the market, today, reacted negatively to the 10-K, pushing down the per share price of UNTK, the company’s equity. The push-down was on relatively modest volume, but was still significant.

I was not, per se, surprised about the price drop. Frankly, it takes a PhD to decipher the 10-K and understand its restatements and, reflecting the fact that the company is being litigated by some angry shareholders, including, of all things, a Union pension fund that wants $165 thousand from someone, somewhere or they are going to break some kneecaps, damn’it!, it has far more doom and gloom and caveats than usual.

I am not going to get into the details here, but MER Telemanagement Solutions’ equity, MTSL, has been quite volatile lately, reflecting, I think, a lot of short term traders who are back for a second helping after having amassed and lost riches by trading in MTSL over a very brief period in late 2012 and early 2013 (again, read the earlier postings.)

Today, MTSL took off again, evidence of a powerful dose of speculation about what tomorrow will bring.

So really no surprise here. I think UNTK will normalize rather quickly as Unitek Global Services pushes out the pending earnings statements for the first and second quarter of fiscal year 2013 (and, I think, uncovers the diamond-in-the-rough that I have found,) and I think MTSL can go almost anywhere (up, down, or sideways,) depending on what the company says in its earnings results (I view the results as pretty deterministic, with the wildcard being the company’s presentation — something that the company has had enormous difficulties with in the past) and the mood of the emotion driven speculators.

What is a surprise is the symmetry. Almost as if they were possessed UNTK went down $0.25 and MTSL went up $0.25, as shown below. Spooky!


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