Comments: SunnComm v Halderman - recanted!

There's even more going to this story than meets the eye.

Starting in May 2003, the stock zoomed from 10 cents up to 40 cents. (The stock was under a nickel as late as April 24th); The subsequent "precipitous" drop was nothing more than the stock dropping back to its prior trading range -- back under a dime.

I found it curious that the SunnComm stock had this huge May 2003 move occurred in the middle of a long news blackout. That aroused my curiosity, and makes, in my opinion, the activity in this pink sheet stock suspect.

So I went back and looked at all the news releases this year. Because there appears that there were no offical news released between April 4th 2003 ("Tattoo Media joins forces with SunnComm Technologies") and June 2, 2003. (Macrovision, SunnComm Race To Protect Music From Pirates) that could explain the stock's thrust upwards.

I did, however, notice that sometime in August, the company announced a 2 Million Share buyback. Why a microcap pink sheet company feels the need to buy back stock, I couldn't possibly tell you.

But if I was advising the Princeton student, I would suggest the first thing he do is have his lawyer find out if any insiders, officers, board members, or major shareholders did any buying during that period.

Posted by Barry Ritholtz at October 13, 2003 03:28 PM