Gediminas Jasionis

DayStar Technologies Inc. (NASDAQ:DSTI) Traders Buy Into Short Term Opportunities

by Gediminas Jasionis July 13, 2010
dsti_chart.pngThe inactive DayStar Technologies Inc. (NASDAQ:DSTI, DSTI message board) is up on a random breakout once again as traders noticed a couple of days of positive action. Rallying without any support from the fundamental changes, the price is likely to demonstrate only a short burst, before profit taking kicks in.

DSTI added an amazing 46% on Monday as the beginning of the week was welcomed with a wave of buying. This increased activity could be attributed to the changing mood in the broad stock markets as well.

The downtrend oriented penny stock likely demonstrated a short squeeze, considering the heavy volume and the sudden price increase. Though, with the lack of long term value growth triggers, like news, this price play is only meant to carry on until the first day of decline. Sudden collapse is also a possibility here.

The stock bounced off the $0.75 low, suggesting the company is worth to have at least $3 million market cap. Net tangible assets actually hold a value of over $19 million, but it has been rapidly declining over the past year as the company is still constructing their first production line and has no revenues.

daystar_technologies_logo.jpgSolar photovoltaic products oriented Daystar has only recorded minor revenues, they barely have any cash and rely on external funds to continue operations. In their 2010 Q1 filing the company points out they will need substantial additional funding to complete the production line.

On the bright side, they have already secured a supply contract with Blitzstrom GmbH and have LOI with juwi Solar to collectively purchase up to 75% of DSTI's production through 2011. This means the main hold back is now the lack of funds delaying the start of production.

Comments 0

Type the characters that you see in the box (5 characters).