Alliance Healthcare Services, Inc. (AIQ)

[Flatcat]

You are in for a real surprise. Expect this stock to climb rapidly in the next quarter due to games being played by management and the market.

AIQ is scheduled for a 1:5 reverse split effective December 25. They are playing the same game than THC did the last quarter. AIQ's earnings per share are going to go up as is their price per share. One can assume from this that they are going to have a positive quarter.

What happens when the reverse split is history is that the loss last quarter of $-0.02 becomes $-0.10. The earnings for their new "positive" quarter go up by a factor of 5 per share. Wow - what a wonder job we have done manipulating the stock price and earnings.

In the THC case the PE ratio is about 50 for a poorly managed company but the executives are harvesting from the investors. See the news items of insider selling. You can expect the same situation here. AIQ executives than own buy right after the earnings announcement and then get out near the top.

This scenario will squeeze the shorts hard. It will be another quarter or two before the market catches up with the deception. If you are short this stock then you will just help them push the price higher. This is a game and you don't get to make the rules.

Based upon THC, I would buy after the next earnings, they should be positive, ride it up and get out. I do not have a position in this stock.