The upward trend of Rushnet Inc (OTCMKTS:RSHN) seems to have legs. Shareholders have multiplied their money several times in January. But, that’s not all. The trading volume has also hit all-time records. As much as 0.5 billion shares have been exchanged in a short period of time. Check the share price action and form your own opinion:
The company and its stock catalysts
RSHN Transition Corporation, formerly known as Rushnet, Inc., is headquartered in Michigan City, Indiana. It is “currently awaiting the review of its reorganization and restructuring by certain regulatory and self-regulatory agencies.” According to the company materials, RSHN is a very old entity. The company was founded in 1999.
What are the company’s catalysts?
Since the company is transforming the business, any new information makes the stock price run. Mainly, changes in the ownership, headquarters office changes, and connections to other companies are very significant. Market participants are studying these features. Hence, we will do the same in this new update.
What’s going on?
In January, the company woke up the market once the following document was released:
On January 12, 2018, after market participants regurgitated the document, the volume spiked. The reaction was remarkable. More than 0.5 billion shares changed hands, as the market expected a great business to arise from the current restructuring.
What are the new details?
The most remarkable is that the current owner, Mr. Hudon, is said to be working for PotNetwork Holdings Inc. At least, this is the information that he has provided on his facebook profile. Check his profile:
Also, please note that he is an advisor to many other firms:
– Advisor to the Board en PotNetwork Holding Inc.
– Senior Advisor to the President en IDGlobal Corp
– Chairman of the Board, President, and Chief Executive Officer en First Intercity Bancsystems, Inc.
– Managing Director, Managing Trustee en Silver State Real Estate Trust
– Chairman of the Board and CEO en Residential Income Properties, Inc.
– Chairman of the Board, President, and CEO en Zonal Holding Company
– Chairman of the Board, President, and CEO en HUDSON CORPORATION
Our due diligence (DD) suggests that he is a busy man with outstanding expertise in business. But, we encourage readers to do their own DD on him. In addition, in our opinion, his affiliation with PotNetwork Holdings Inc. is another interesting point. Many market participants are speculating that this “connection” means a lot for RSHN. Check this comment from a popular forum:
“There are a multitude of reasons, but in the case of POTN who is a “holding company”, they would use this shell to create a new subsidiary business in the CBD/MJ market. this allows the holding company to profit in subsidiary company activities, while providing a layer of protection to the holding company against any lame Fed/state prosecution to the subsidiary.” Source
Additionally, there are some interesting facts that are worth noting. They all mean that something is changing inside RSHN. Firstly, there is a change in the headquarters. In January, the company moved to Colorado. Is RSHN, like PotNetwork Holdings Inc, trying to profit from flourishing cannabis industry in this state? Furthermore, there is a long list of new rumors out there. Also, the RSHN’s trading chats recently exploded.
Will the stock chart creep up even more? No market participants can confirm it. But, everybody will accept that many things are changing amidst this restructuring process. This is a positive factor.
Short Interest is decreasing
There is another interesting fact that nobody mentioned. The short positions have decreased a lot. Since the company commenced to transform itself, the short interest decreased from 857,909 to 144,540. Are shorts fearing a change in the business model? Are they expecting share price increases, so they are decreasing their exposure to the stock? It may be the case on this name. Check the following table and form your own opinion:
|DATE||SHORT INTEREST||% CHANGE||AVG. DAILY SHARE VOL||DAYS TO COVER||SPLIT||NEW ISSUE|
Currently trading with a market cap of $2.8 million, RSHN is an interesting story among small caps. There is still a lot to be done. Firstly, the management needs to upload the financial statements. Without them, holding a position on the stock is quite speculative. Furthermore, if there are headquarters changes, the trading exchanges need to get noticed.
According to the company materials, 4,300 shareholders trust the company. That’s a good figure, but we hope that they have done their own due diligence.
To sum up, RSHN is ready for an adrenaline ride!
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Disclosure: We have no position in RSHN and have not been compensated for this article.
Image courtesy of Heather via Flickr