ATRM Holdings (fka ATRM)

[MiamiGent]

ATRM: Coming Down..

...like a piano hoisted to the window of a fifth floor walk-up coming unloosed from its strapping.
Staying clear of ANY long position now is "key" to not getting crushed by this petal pump Steinway hurtling to the ground.

Here's why (in no particular order):

1. The author of the S.A. article did three S.A. articles prior to Friday's ATRM Pump piece- all plummeted like the afore mentioned piano:

Nov 19 SGOC http://stockcharts.com/h-sc/ui?s=SGOC

Oct 15 NVGN http://stockcharts.com/h-sc/ui?s=NVGN

Aug 15 OPXA http://stockcharts.com/h-sc/ui?s=OPXA

2. The Press release speaks of new business but is woefully lacking in details to indicate whether it was "good business" (or just business they went out and "bought" to make a splash to sell shares into?).

3. Company is just about out of money. The 10Q filed Nov 19 for period ending 9/30 reports they should have enough money to take them through the end of December. It gets much worse...

4. They only had rev's of $1.9M for the last nine months. Before retirement, I had more rev's than that working out of my second bedroom in my boxer shorts, lol.

5. Of that $1.9M, the biggest contribution was from its reliability test equipment (57%). The company sold this segment on 6/14 lock, stock and barrel to raise cash. It was like selling the bedroom furniture to pay the electric bill.

6. Revenue for the last nine months for the remaining segment of its business- test handling equipment was $300K.
The company also sells replacement parts, servicing, etc amounting to the difference.

7. The S.A. author in his pattern pump piece sets a paragraph in this bold type heading:

..........Dismissal of Litigation..........
and goes on to say, ..."positive development for the company...involves some closure on a lawsuit that has distracted the company for the better part of two decades" Notice the "some closure". The plaintiff promptly filed an appeal- the suit continues! You might have assumed from the bold title that the companies legal woes were behind the company- they are not.

8. The author goes on to cite this passage, blocked off and presumably from the company:

The litigation was a concern to our customers and shareholders, prompted significant defense costs, and proved to be very distracting to our normal course of business. We can now fully concentrate our attentions and resources on growing the value of the company.

But the company says this in the 10Q filed Nov 14 this:

Legal Proceedings

As reported in our Form 10-K for the year ended December 31, 2012, we are subject to litigation captioned UTHE Technology Corporation vs. Aetrium Incorporated et al. in the United States District Court for the Northern District of California. On September 13, 2013 the court entered final judgment dismissing all remaining claims UTHE asserted against Aetrium in the litigation. On September 23, 2013, UTHE Technology Corporation appealed the district court judgment to the United States Court of Appeal for the Ninth Circuit. The appeal is currently pending.

So, Mr S.A. author, was this a quote from the company subsequent to the dismissal but before the appeal was filed a mere ten days later? And why would you cite this instead of acknowledging that the legal mess which is draining the company continues. Unconscionable.
Note: anyone who lost $$ on this pump and dump and are motivated, there's your start.

9. The Pump and Dump author is like a ghost in the night, anonymous and exactly zero posts other than the four now P&D articles. Not one response to the 55 and counting questions that follow his articles- folks addressing their concern for those who are left holding the bag on these plays (contrast that to S.A. author Spencer Osborne who writes about ARNA and steps up to answer nearly all the responses his articles generate).
The S.A. pump meister goes by the moniker of "Small-Cap Momentum Advisors". "Advisors"- how many are behind these questionable pumps articles?

10. The author didn't mention a one for ten Reverse Split effected on October 11th! Seems a glaring omission to me- unless it didn't suit the pump theme, of course.

11. So with the company nearly out of cash and all those shares back in the treasury, little doubt they'll find there way back in the pot- dilution. Elementary, Watson.

12. The activist team has been around about a year now and little to show for it until this nebulous announcement of business from two customers for 2014- one new customer and one current. No mention that the company has lost a major long term customer.

13. The growth, profit margins, returns for this company are beyond bad- they're abysmal!

14. The company has not had a profitable quarter in years and BK cannot be ruled out. Heavy diluting can be expected into this pump which would stay matters for a while.

15. After nearly twenty years, institutional and mutual funds hold just 4% of the company, reducing their holdings 22.9% in the last reporting quarter from the previous quarter.


Folks, I've got to go horizontal for a few hours before the opening bell but here are a few fundamental ATRM metrics to consider for year over year ending 6/13:

Revenue Growth: -54.1%

Gross Margin: -87.5%

Return on Equity: -100.7%

Net Margin: -301.7%



Disclosure: I shorted this Pumped and soon to be Dumped ATRM Friday at 10.35 average, gross.

I abhor these manipulated Pump & Dumps. They hurt a lot of people, including me when I was starting out in stocks some years back.

Hope all had a wonderful Thanksgiving or Thanksgivukkah and plan to slide into a nice long weekend!

MG