CommercePlanet Inc fka CPLT

[sortman]

Very interesting:

An online marketing company (Commerce Planet - CPNE) that has been plagued by naked short selling on foreign exchanges now has the perfect setup for what could be an extraordinary short squeeze.

1) Stock closed at 68 cents yesterday after trading as high as $3.50 in the last few months before it become the poster child for naked short-selling.

2) The company has no debt, trailing twelve months earnings of $0.24 per share (P/E = 2.9) and is currently on track to grow earnings by 50% year over year. The company has a total market cap of $33 million at yesterday’s close, but has $5 million in unrestricted cash in the bank + another $5 million that is restricted due to merchant account requirements. Thus, nearly 1/3 of the market cap is in cash.

3) In a development that has just materialized over the last 48 hours, a company that had previously sought to acquire CPNE, but walked after acquiror had internal issues, has now purportedly returned to the table. Previous price range was close to $100 million before deal fell apart. There is a story out this morning that mentions the company:

http://biz.yahoo.com/seekingalpha/070824...

4) CPNE became a favorite of a traders that use foreign exchanges to sell the stock in a “naked short” failure to deliver transaction. Last week, the company brought in some “hired guns” to bring down the syndicate and get the stock delisted from all unauthorized and foreign exchanges. Here is the announcement:

http://biz.yahoo.com/bw/070816/200708160...

Word on the street is that all such listings will be removed as of close of trading on Friday August 24. This will give the short positions only T + 2 days to deliver the shares or have a buyin. If true this can and should result in a major rush to buy these shares sometime over the next few trading sessions. Since the stock is below $2, removal from these foreign exchanges will make CPNE all but impossible to sell short. If some shareholders' numbers are correct, this could remove about 80% of the selling volume and in turn give several million naked short shares a deadline for repurchase.

5) The company is holding its first investor conference call ever next week to answer questions/discuss the actions they have taken and also to make a “major strategic announcement”. Here is the link:

http://biz.yahoo.com/bw/070820/200708200...

We think the announcement could include 1) Bd. Authorized stock buyback of up to 20% of the company’s outstanding shares. There is more than enough cash on hand to complete such an offer. 2) We also think they will use the call to discuss a new technology they have developed that will make big waves in the online advertising industry, especially in light of the recent acquisitions of nearly all the independent ad auction exchanges by Microsoft, Yahoo and AOL.

The combination of all of these factors could easily drive the stock to a new 52 week high over $4. When you consider the number of short sellers who will likely be trying to buy back shares in the open market, it could push the shares even higher than that.

This seems like a nobrainer for traders who like to play a short squeeze. Downside is about 5%, upside 500% or more. Why wouldn't traders buy a few thousand shares?