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TEMPUS APPLIED SOL COM USD0.0001 (OTCMKTS:TMPS) Climbing Back Up The Charts

TEMPUS APPLIED SOL COM USD0.0001 (OTCMKTS:TMPS), the aircraft company, has sold off on no news after a large spike that occurred at the end of June. The large stake that Johan Eliasch owns in the company seems to be the reason for the increase in the share price. We wrote “TEMPUS APPLIED SOL COM USD0.0001 (OTCMKTS:TMPS) Is A Smart Money Play“, wherein we provided proof of his interest in TMPS, and also noted that ‘AQR Capital Management LLC’ had bought 715,771 shares.

Now, that the share price went down, is there anything new? Not really, it is the same company, but cheaper. Here is the most recent share price action:

Source

 Tempus Applied Solutions

Tempus Applied Solutions Logo (PRNewsFoto/Tempus Applied Solutions Holdin) (PRNewsFoto/Tempus Applied Solutions Holdin)

Source

The business objective of TMPS is the following:

We provide turnkey flight operations; customized design, engineering and modification solutions; and training services that support critical aviation mission requirements for such customers as the U.S. Department of Defense (the “DoD”), U.S. intelligence agencies, foreign governments, heads of state and high net worth individuals worldwide.Source

Why is the company different from its competitors?

The most significant factor in the company is the accumulated expertise of the executive management. It possesses over 25 years of combined experience in the special mission aircraft industry. Additionally, the team has a network of relationships with the U.S government, something that new companies operating in the sector don’t have. “Contracts with U.S. government end users in excess of $500 million” have been won by the company thanks to this network.

Recent Developments – New contracts signed with the United States Air Force

On June 27, 2017, the company put out that it will be providing technical services and flight operations for the United States Air Force. More specifically, TMPS will be working with the USAF Weapons Development and Integration Directorate. The USAF’s High-Altitude LIDAR Atmospheric Sensing (HALAS) system owned by the United States Air Force will be integrated into a modified Gulfstream IV aircraft. TMPS explained in more detail the rationale behind the operations in the following words:

“The laser-equipped sensor has the capability of measuring, with great precision, atmospheric conditions well into the stratosphere. Tempus will assist in the airborne testing of USAF’s ground-proven HALAS system upon completion of the sensor integration and airframe modifications. If exercises are successful, atmospheric testing will be substantially improved, with a significant reduction in error factors from older sensing capabilities.” Source

Tempus CEO, Scott Terry, explained why the contract is a good news:

Tempus is looking forward to working with the USAF on this project, this is a great opportunity to participate in a project that will provide critical insight into atmospheric conditions and its effect on next-generation aviation platforms. We hope to continue working on such programs with USAF in the future.” Source

It is expected that the contract will increase the revenue line by $1.2 million. In our opinion, these revenues should have been celebrated by the market. However, no market reaction was seen. This is not what usually happens.

Source

Other players also claimed that share price activity is unusual

Many investment sites remarked in the last week that the share price melt down of TMPS was not normal. We saw new comments about the firm On Yahoo Finance and iHub, but many others talked about the strange behavior of the stock:

  • Davidson Register wroteTempus Applied Solutions Holdings Inc (TMPS) Sees The Tape Move Mid-Market“.
  • Benton Bulletin’s piece was named “A Chartists Perspective on Tempus Applied Solutions Holdings Inc (TMPS)“.
  • Sparta Review gave some insight in “Unusual Activity Spotted in Tempus Applied Solutions Holdings Inc (TMPS)“.

Either there is something that the market did not get to know yet, or short sellers are pushing down the share price.

Short sellers

The recent increase in the amount of short positions is significant. Have a look:

Date Short Interest % Change Avg. Daily Share Volume Days to Cover Split New Issue
Jun 30, 2017 136,647 660.50 3,318,339 1.00 No No
Jun 15, 2017 17,968 994.94 69,480 1.00 No No
May 31, 2017 1,641 -45.01 42,947 1.00 No No
May 15, 2017 2,984 71.40 22,282 1.00 No No
Apr 28, 2017 1,741 -66.74 33,678 1.00 No No
Apr 13, 2017 5,234 4.83 29,150 1.00 No No
Mar 31, 2017 4,993 -78.47 19,618 1.00 No No
Mar 15, 2017 23,193 100.00 27,615 1.00 No No
Feb 28, 2017 0 -100.00 19,188 0.00 No No
Feb 15, 2017 5,000 61.29 27,803 1.00 No No

Source

The key question here is, are these short positions justified? Short sellers may have been pushing down the share price without news.

New Security holders showed up

The following funds exercised some derivative positions held in the company, thus we could get to know the name of other security holders of the company:

  • Hudson Bay Master Fund, Ltd.
  • Empery Asset Master, Ltd.
  • Empery Tax Efficient, LP
  • Empery Tax Efficient II, LP
  • Cowen Investments, LLC
  • CVI Investments, Inc.
  • Hudson Bay Master Fund, Ltd.

The securities exercised were warrants and preferred stock. The company issued new shares, thus the dilution in the stock increased. Readers need to note that the amount of preferred stock now held by them is zero.

Name of security holder Number of shares
of Preferred Stock
held prior to
conversion
Number of shares
of Preferred Stock
converted into
shares of common
stock
Number of shares
of Preferred Stock
held after
conversion
Hudson Bay Master Fund, Ltd. 1,062,778 1,062,778  
Empery Asset Master, Ltd. 152,394 152,394  
Empery Tax Efficient, LP 112,497 112,497  
Empery Tax Efficient II, LP 151,778 151,778
Total 1,479,447 1,479,447

Source

Additionally, the number of warrants held by them was also reduced.

Name of security holder Number of Series A Warrants held prior to exercise Number of Series A Warrants exercised for shares of common stock Number of Series A Warrants held after exercise
Cowen Investments, LLC 393,750 393,750
CVI Investments, Inc. 468,750 468,750
Hudson Bay Master Fund, Ltd. 937,500 25,000 912,500
Others 1,387,500 1,387,500
Total 3,187,500 887,500 2,300,000

Source

Conclusion

In this piece, we reviewed the news released by the company to see whether there is a serious justification for the recent share price melt down. We found that the most recent and unique news was good. The company gained a contract with the United States Air Force and will be making $1.2 million in revenues. Hence, we concluded that short sellers may have been pushing down the share price.

What happens now? Short sellers can continue pushing down the share price. But, we expect them to get squeezed as news hits the tape and pushes up the share price. To sum up, there is a lot of market activity in this company at the moment, thus readers should follow the stock closely.

We will updating our subscribers as soon as we know more. For the latest updates on TMPS, sign up below!

For the full story, check our our complete coverage on TMPS.

Image courtesy of Efren via Flickr

Disclosure: We have no position in TMPS and have not been compensated for this article.

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TEMPUS APPLIED SOL COM USD0.0001 (OTCMKTS:TMPS) Climbing Back Up The Charts
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