9/29/2011 EOD: $1.02
+0.00 (0.00%)
This market is really pretty treacherous, and totally unpredictable. CNIT is faring poorly, having underperformed all major indexes in the recent past, and approaching dangerous territory as the stock now border $1 per share. $1 is a psychological barrier for many small stocks like CNIT, and when breached, it can sometimes send the stock much lower very fast. Having said that, $1 can also serve as an area of strong resistance. Today we saw the stock briefly go to $0.98 and then return to $1.02, ending the day unchanged. Volume today was also quite high (~300k) which is a good sign that this area will serve as a strong area of resistance for CNIT.
Truthfully the direction of the market will ultimately determine whether CNIT rises from this level or shoots lower. If the market flip-flops for a while, or resumes a bullish trend, I feel *very* good about CNIT. If the market continues to sink, then CNIT may go lower with it.
With cnit under a buck and the feds probing chinese firms all signs look pretty bleak. Luckly we still have the 5million repurchasing option which Lin will have to pull the trigger on if he wants to keep the stock on the nasdaq.
ReplyDeleteWith 29 more days until delisting (assuming we don't pop back over a buck) If the next earnings report is good I believe he'll wait until about a week before the the report, buy up 700,000 shares at a 1.5 allowing the earnings report too keep the stock above the one dollar levels for the 10 days required to maintain nasdaq listings. This will leave him with 4million to buy back stocks if we so happen fall under the 1 dollar level again.
If the earnings report looks bad, I believe we could see a bigger buy back, perhaps the full 5million. Thus boosting share price as well eps.
Over all though, with the economic news coming out of china, it does not look good imo.
Hmm, I'm not very familiar with the latest rules & regulations on delisting. Frankly I find it very unlikely that CNIT will let it happen, especially, as you say, with the stock repurchase program in place. That said, you're right in pointing out that macroeconomic factors and the news from China doesn't bode very well.
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