Dear Flyby,

Please don’t consider me as being flippant when I say “…it’s because we have more sellers than buyers…”.  I merely mention that as a segway into why we might have more sellers than buyers.

I think it is as simple as investors not believing/understanding the situation, coupled with the fact that many do not understand the business they invested into.  I do not read the blogs on other platforms, but my staff does.  When I am told that people believe that an L/C in the favor of Drosrite International is dependent on their financials (which it is not), or that there is serious discussion regarding the Press Release  made by Drosrite International  wherein they announced that they had signed a  major deal BUT IT DID NOT explicitly state that the client signed as well (and this was given as evidence that the deal wasn’t signed yet),  does it surprise anyone that these clowns would sell?  They have no clue what they invested in…

If enough clowns sell it raises questions by potential buyers, particularly those new to the situation: why would existing investors sell now?  … new investors who are willing to venture where others are selling, coupled with existing investors who are topping up their holdings at these prices (I know several current investors who understand and believe in the story who would like to invest more but are already fully invested), I believe, represent the buying interest.  The fact that the stock traded over 500,000 shares today, in a relatively short time, on no new information, and that it only decreased by 4 cents after rebounding from its low is, I think, more interesting than the decline itself.

What might motivate buyers is anybody’s guess, but I would venture to suggest that the “delay” that is so concerning to those that are worried is nothing to worry about at all when the following facts are considered;

1)       The target date for the down payment was November 18th .

2)       An agreement to paper an L/C was announced as the cause for the delay

3)       Between then and now we had two major events take place

a)       X-mas vacation period in North America

b)      Spring break in the Kingdom of Saudi Arabia (yes…you read that right: Spring break)., which spanned the past 2-3 weeks and ended last week with everyone back at work as of last Sunday (work week there is Sunday to Thursday inclusive).

4)       The transaction involves 3 companies and at least 1 bank.  Everything that is proposed…every suggestion/amendment must be:

a.        translated into two languages

b.       Reviewed by lawyers

c.       Sent for multiple approvals/signatures

…. we are talking every change/proposal.  Assuming every bank, company and set of  lawyers (there are 3 sets) take 1 day each to review it plus an extra day to translate ,we are talking 8 days per change…and that is if each party takes 1 day to review it.  If you assume 2 days (which is not unreasonable) you are talking over 2 weeks/ change.

Now, when you consider that between December 18th and January 19th very little progress could be made given the vacation schedules mentioned above, one quickly realizes that we all had less than 4 weeks to move this along.

So, when one takes these, and other, “normal” elements into consideration one may come away with a very different perspective than some of the chicken littles out there.  That is not to say it is easy to see the stock tumble from the highs of when the transaction was announced (how can we be valued less than we were then?  One wonders if we were to announce that the deal fell through would the stock bounce back up?  Just kidding there, Flyby…I was being facetious).  And I feel for those that are selling for possibly the wrong reasons…

I hope this helps a bit.  I am not suggesting you buy, sell, or hold the stock. Far be it for me to assume such responsibility…I am merely trying to give a different perspective to a very complex matter, and I may be wrong in my analysis of investor actions/sentiment.

Thanks for posting such a short, yet complex question.

Thanks again,

Sincerely,

Peter