JADE – Cover Recommendation

By: ispeculatornew
Date posted: 08.27.2007 (12:00 am) | Write a Comment  (0 Comments)

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JADE – LJ International (Nasdaq) (Closing Price – $6.76)

LJ International still has not released an earnings report since they reported their third quarter earnings report last year. They issued a press release on June 28 stating that they were changing their auditor and that they would issue their annual report on July 16. However, they did not report their annual report by that date and to my knowledge they have not given a new date of when they will file their annual report (not to mention the Q1 and Q2 reports from this year).

When LJ International missed the extended deadline of July 16 to file their annual report they were no longer in compliance with NASDAQ requirements and they became in danger of being delisted from the exchange. Consequently, the stock price suffered a huge drop last month and the stock price is currently trying to find support in the six dollar range.

The longer it takes LJ International to release their financials the more the stock price is going to suffer. The stock price will take another huge hit if JADE get delisted. On the other hand the stock price will see a quick jump if they finally release their earnings reports.

If you are still holding my initial short recommendation you now have a decent gain so I am going to recommend to cover. There is still potential downside for JADE but I think the stock price will jump up when they release their annual report (regardless of the results). Therefore, I think it is better to go ahead and book the gain.

Disclosure: I am not shorting shares of JADE.

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