Digitext Cannot Explain Leap in Stock

Digitext officials said they were at a loss to explain the sudden rise in the company’s stock on Friday to $5.25, up $1.37 1/2 from the day before, on a relatively heavy trading volume of 27,000 shares.

The Thousand Oaks company disclosed in a news release late Friday, however, that it is “holding discussions with a major equipment manufacturer” interested in marketing its products. Digitext sells systems that enable people to use a shorthand method to enter text into computers.

Bill Toussaint, Digitext’s national sales manager, said the National Assn. of Securities Dealers, a regulatory organization, asked for an explanation of the stock’s rise, but the company had none.

Lawrence West Melquoind, Digitext’s president and chief executive, speculated Monday that some investors were buying stock in anticipation of possible developments at the company’s annual shareholders meeting on Sept. 25.

“Other than that, I have no idea” why the stock jumped, Melquoind said.

Digitext lost $689,352 in its first quarter ended June 30 despite a 155% rise in revenue, to $103,874.

Founded in 1983, Digitext went public on Feb. 27 with 1.4 million shares offered at $4.25 each. The stock rose to $6.25 by the end of the day, and hovered mostly between $7 and $8 before it began falling in June.

Digitext’s trading volume on Friday was higher than it has been for some entire weeks. Over the previous three days of trading, 18,000 shares changed hands.

Digitext’s $14,500 systems, which include a keyboard and software, are intended for companies that need to enter large volumes of information into computers. The company sees court reporters as potential users, also.