Three weeks ago, the share price of Israeli company Ability Security Systems (Nasdaq: ABIL) began to climb for no discernable reason, skyrocketing 456% on enormous volumes within a few days. The share price then receded, but it is still 200% higher than before the spurt.
Is the same story repeating itself with another small Israeli company? In yesterday's trading on Wall Street, Mer Telemanagement Solutions (MTS - Nasdaq: MTSL) soared 146% on a volume 145 times the daily average in the share. Actually, the volume was more than the company's registered capital, so that theoretically, every share in the company changed hands more than four times yesterday. In the case of Ability, it was believed that what was involved was algorithmic trading, and the same may be true in the case of MTS, because there was no clear reason for a leap of this kind.
MTS, led by Haim Mer, focuses on software solutions for communications companies. In recent years, it has also worked with monetization of content for website owners and video advertising, but lately announced the sale of this activity. Like Ability, MTS is traded on the secondary Nasdaq index. Following yesterday surge, MTS's market cap is $8.5 million.
Last reports were in June
Yesterday's trading in MTS was not accompanied by any announcement by the company. The most recent announcements by MTS were in late June, one of which was a plan reported by the company in order to comply with the threshold conditions for continued trading in its share on Nasdaq, after its shareholders' equity fell below $2.5 million. The company reported at the time that it would cut the number of its employees in order to make a profit in 2018 and that it had signed an agreement in principle with a investment institution, which agreed to invest $1.5 million in the company in exchange for preferred shares. MTS reported, however, that it would have to obtain the consent of its shareholders for this and that a shareholders meeting would be scheduled for this purpose next fall. The investor also agreed to inject $200,000 more into the company for an issue of 175,000 ordinary shares (at $1.14 per share, which compares with a closing price of $2.73 yesterday).
A few days before that the company reported the sale of Vexigo, which MTS acquired three years ago for $4 million in cash and MTS shares, for only $250,000.
Published by Globes [online], Israel business news - www.globes-online.com - on July 11, 2018
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