zippity: It should be clear to anyone who knows the details that EDIG stock has been heavily manipulated by the seasoned on and off-shore PIPE financiers holding the convertibles over the last couple of years (Polis, Barnes, Basso, Bristol, etc.).
EDIG stock almost always goes up a bit after bad news. The worse the news, the more price support seems to be shown. On the contrary, news that seems good doesn't move the price up as might be expected.
e.Digital is in a situation where most longs don't see any benefit in selling their shares, even if the company is about to go BK. There are a few momo (momentum) traders, but the average volume is so low that most who try to play the momo will lose on their play or hold for the next expected momo move.
The vast majority of the sell pressure is from the financiers of the several PIPE deals done in the last 2 years, for which registration of conversion shares has been delayed.
There are 40 million shares just registered effective 8/4/06 for some of the PIPE financings at a conversion price of $0.08. In order to maximize their profit, the PIPE financiers need to sell (actually short) at a price as far above $0.08 as they can get and then cover their short with their 8 cent conversion shares. They don't want the price to collapse from the weight of their selling.
Seasoned PIPE investors in the current soft-floor PIPE environment know that they need to keep the share price as strong as possible in order to make the maximum gain. If they can't gain at this price, they would need to wait until a new soft floor is set with a subsequent stock-based financing (via their anti-dilution clauses).
Therefore IMO some of e.Digital's PIPE investors play games (some of which are illegal, such as "painting the tape") to manipulate the daily share price. They don't want longs or temporary trading longs to lose confidence. They do best if their price support creates enough confidence that investors buy-in or add to their positions which allows them to sell.
Don't forget that there are still another 20 to 25 million shares pending registration for other existing PIPE financings. These are also priced at $0.08. Many or most of these financiers overlap with the financiers of the other financings, including the ones that just registered the 40 million shares.
Keep in mind that all of e.Digital's PIPE financings contain anti-dilution clauses that reset the conversion price and number of conversion shares eligible whenever the company offers stock below the current conversion price ($0.08).
AI
