JRJR Networks Update
Lots of interesting things happening at JRJR, but no press release yet about earnings call date or time, leading us to wonder if the company is going to file late given that the deadline is today. Given that this is the first K filed with a new auditor, it is not that surprising that the company would be filing at the last minute or even filing late, but it is disappointing that nothing has been communicated to shareholders about a time and date for the earnings conference call by March 30. The hiring of an experienced CFO is a very positive development and will hopefully lead to improvements in many processes that will ensure that reporting is more timely going forward. We hope that communication with shareholders will be improved as well.
Trying to read the tea leaves remains difficult, as we would typically see such a delay as negative, but on the other hand we note the 8k filing this morning that announced the significant stock option awards that were priced this week. If the company was about to report a very poor quarter or if they had material issues that might drag the full year audit out for an extended period, you would think that they would wait until later to price those options on the expectation that the stock price would fall and the options grant could be at a lower price.
Last week’s release of the reported short interest indicated a decline of nearly 45% and differing interpretations of the most recent naked short interest report (the first after the registrar, cusip, name change) have lead some to see the position as substantially covered and others to see noise in the figures indicating it could still be outstanding. While we were not privy to the details of that report, we would think that the recent price decline despite positive developments at JRJR would lead most shorts to cover their remaining exposure while they have the opportunity to do so at an attractive price. We note that some of the trading this morning appears to reflect short covering. Though it is not in great volume yet, the pattern used to walk the price down has been used in several trades to buy this morning, we have not seen that occur in many months and this is a very interesting development that bears watching. Regardless, JRJR shares are very cheap again and this presents a great opportunity for investors.
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