By Violeta Slavtchevska
Date: Jun 2, 2010
Following the motto "no news is good news", especially for a company in a bankruptcy proceeding, Mesa Air Group, Inc. (PINK:MESAQ, MESAQ message board) made yesterday one of its most spectacular jumps for this year. The volume accumulated, while the market was perplexed about what drives the price of the under $1 stock up.
On no recent news, Mesa Air Group jumped 36.49% up on the large volume spike of over 1110%. More than 3.3 million shares were traded and the stock closed at $0.078, a value that investors had not seen recently.
The large daily volatility also had not been seen often over the last months and reflected the market's confusion about the surprising rise.
There is no information for Mesa Air Group having paid to promoters, no press releases have been made, and actually that was the "good news" for the market. Only a newsletter had the air carriers' holding company on its yesterday's watch list, but it is unlikely this to have caused the huge volume spike. The lack of fundamentals also leaves room for any kind of speculations, giving support to the theory that hedge funds are betting on Q stocks to rise during the bankruptcy process and are accumulating shares.
An investor attempted to spread the word about Mesa Air being a potential acquisition target and has also done good to the stock, as it dropped severely on recent filings about major shareholders selling their shares out. End of April, AAR Corp., another provider of aviation products and services, declared to have sold small amount of its shares in Mesa Air, but is still holding 4.98% of the outstanding stock. Previously, another major shareholder, an investment fund that held 13 million shares of the company, filed in February that it is not possessing shares anymore.
Mesa Air started climbing slowly up two weeks ago, despite the court's decision against the company's subsidiary Freedom Airlines in its litigation with another airline, that attempted to terminate an agreement for 22 regional jet aircraft. Current financial data is not available, but the company is now in a business reorganization process after filing voluntary bankruptcy petition and getting delisted from NASDAQ in January this year.
