Converge Technology Solutions Corp T.CTS

RE:RE:RE:"Gift From The Investment Gods"....Jordan Zinberg

[AlwaysLong683]

1) I never accused CTS of engaging in any illegal activity. They are perfectly within their rights to publicly announce a strategic review. Other firms have done likewise in the past. I also never accused them of making false statements. What I stated is that I got the impression that CTS may have seen the share price dropping like a stone and decided that publicly announcing a Strategic Review (which I anticipate they will complete) would help stop the slide. I don't know this for a fact - I just found it curious that the announcement came at a time when the share price was plummeting. I have no reason to doubt they have received interest from other parties, I also don't doubt they are weighing their options given the current and anticipated future landscape of the sector in which they operate and the current state of the company.

2) In their press release announcing the Strategic Review, it does not state that they received "unsolicited bids". What it does state is CTS has received "expressions of interest". This is a much broader statement that may simply have been no more than phone calls asking if the BOD would consider selling the company. Quite frankly, I would be surprised if a suitor would make any type of "bid" (conditional or othewise) without first signing a NDA and taking a look at the inner workings of CTS, discussing the possiblity with their colleagues, determining what the company is worth to them given the sum total of the information gathered, etc.

3) As you indicated, there is no obligation for the BOD to publicly announce they have received expressions of interest from other parties on the sale of the company, are negotiating a possible sale, considering other options such as asset sales, etc.
A recent example, in the tech area no less, is Magnet Forensics. In a press release dated January 20, 2023, they announced they had reached an agreement for the company to be taken out by Thoma Bravo. There was no prior press release even indicating they were considering a sale of the company. There are numerous other examples throughout the years of takeouts that are only discovered with the issuance of a press release indicating the BOD has reached an agreement with a suitor for a given price and a special shareholders meeting will take place to vote on the deal.

If you think CTS deserved a 50% jump from $4 to $6 in less than three months after that Strategic Review press release even with other small cap tech companies gaining some ground (but not nearly as much), that's fine. You are entitled to your view. However, I find it curious that the day CTS announced its Q3 2022 results after market close on November 8, the share price sat at 4.92. On November 9, it dropped over 13% to close at 4.26, so the earnings results didn't impress the market. It then bounced around for the next couple of weeks and closed at 3.99 before the Strategic Review press release was issued after market close on November 22. November 23? Boom. 23% gain in one day. Quite a coincidence. Again, perfectly fine to do, but I have a hard time believing the post Strategic Review run in CTS's share price hasn't been significantly influenced by the hope among shareholders that CTS will be bought out at a handsome premium, and I doubt that CTS will avoid a drop in its share price should the Special Committee recommend no sale of the company.