Today's Guest Blogger is Jon Anderson, who I have been fortunate enough to have met through this Blog and who is an avid participant in our world of stock trading. Jon describes himself as, "a war correspondent-turned-daytrader," which does seem to make sense, in the karma of the markets.
A little less than a year ago, Sulphco, Inc (ticker: SUF; website: http://www.sulphco.com) was a $12 stock flying high on the prayer and the promise of new ultrasound technology that would turn heavy crude oil into light sweet. While the promises remain, prayers have done little in the months since to prevent a steady to slide to $2.25 just a few weeks ago. The reasons are predictable enough. A fair share of bad press, pushed deadlines, and heavy shorting certainly hasn’t helped. And even die-hard longs have described original inventor/chairman/CEO Dr. Rudolph W. Gunnerman as a mad genius, frenzied and Edison-like in the lab, but without the innovator’s business sense or savvy. Some critics call the company nothing more than an elaborate scam and their arguments are at times compelling.
After bottoming out Jan 22, SUF has rebounded with a vengeance. Eight days after hitting a new 52-week low it captured the number one percentage gainer on Amex garnering more than a 25 percent increase. The reasons again seem straight forward enough. A shake up on the board appears to have instilled new confidence in both the promises and the prayers. Gunnerman has been pushed out in a boardroom coup, replaced by a GE PhD heavyweight in the CEO’s office and an investment fund greybeard in the chairman’s seat. Meanwhile, even the bashers are having a tough time dismissing the new Sulphco refinery now being completed in UAE.
The new leadership team concedes there are still technical hurdles to overcome, but in their first conference call last week – hailed even by critics as refreshingly forthcoming – insisted solutions were within a few weeks’ range. Its climb unfazed by a weekend slam job in Barrons, today SUF crossed the $4 mark, up more than 6 percent from yesterday’s close. And this on no apparent news. Meanwhile, 8 million shares are sitting short, still largely uncovered.
If SUF can see a 77 percent increase in three weeks with just a management shake up and a conference call, what would it take to return it to double digit prices? Surely more than just prayers and promises, but it certainly seems to be heading in the right direction.