What Is Up With Opti (OPTI)

Shares of Opti (OTC:OPTI) bounced a bit today in unusual trading after diving 66% last Thursday. The stock ended the trading day up almost seven cents, or 15.7%, to finish at $0.50 on one of its heaviest volume days in the last year. The number of actual trades, however, only numbered an even dozen.

Trading in Opti began the day as quiet as the proverbial church mouse. The opening print of $0.44 was nearly a penny higher than the closing price on Monday. The bulk of the action occurred during the east coast lunch hour as 700,000 shares traded and the price jumped 3.5 cents. The last trade of the day actually occurred two hours before the closing bell on barely a breath of volume.

Prior to last week, the stock had spent the last year drifting lazily in a range between $1.84 and $1.35. The daily volume for the stock since April has averaged 16,000 shares, which makes today’s trading extraordinary for more than one reason. On July 5, 2012, the gentle ride down the river came to an abrupt end as the stock plummeted from above $1.50 to a new annual low of $0.37 on volume that barely registered.

On June 29, 2012, the company released its 10-K that reported the shareholders of Opti had approved a plan of dissolution to be completed by March 31, 2016. In early June, Opti announced a cash distribution of $1.10 to shareholders of record on June 26. If the company is planning to liquidate and cease operations in less than four years, then what possibly could be the reason for today’s activity, especially since the record date for the distribution had passed?

The Palo Alto, California company was founded 23 years ago in 1989. Opti licenses its intellectual property to personal computer manufacturers and producers of semiconductors.

Searches of sites like Stockreads.com and Stockpromoters.com turned up empty-handed for newsletters or promoters that may have mentioned the stock lately. Additionally, no tweeting activity was found.

The lack of news or commentary certainly makes the activity today even more curious in light of the news from last week. For a trade to occur, there must be a seller and a buyer. It is understandable why individuals want to dump their shares. On the other hand, what would be the reason for buying the stock? It is a question traders will be scratching their heads over tonight, and they will wonder if there is more to the story than meets the eye.

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).