‘Party Over’ as Trading in Comparator Skids
Trading in Comparator Systems Corp. shares finally cooled Wednesday following three days of record volume on the Nasdaq market, and the price of the company’s stock fell 36% as part of what some called an unavoidable return to realism.
The price of Newport Beach-based Comparator’s stock had run up more than thirtyfold in unprecedented trading since last Thursday, but it closed Wednesday at 56 cents per share, down 31 cents. Trading was still active, with 80.9 million shares changing hands, but that was far below the record volume of 177 million on Tuesday.
Executives at the tiny maker of high-tech fingerprint identification systems said they are cooperating with a Nasdaq investigation of the bizarre trading activity and stressed that they have done nothing wrong.
“They’re asking a number of questions about what we know about the events of the market,” said Chief Executive Robert Rogers. “Since we haven’t done anything wrong, we’re quite delighted to answer any questions they have.”
Rogers also expressed some bitterness about the critical media attention his company has received. He said he was outraged by television reports that he says falsely accused him of having a criminal past. He labeled as untrue other reports that he had refused to show the company’s new product to reporters.
Rogers and other executives have said that the heavy trading and price run-up stemmed from the company’s plans to unveil a new fingerprint identification system at an Atlanta trade show next week.
“I understand we’re under the microscope right now,” Rogers said. “But a negative spin has been put on everything.”
Industry experts have raised a number of suspicions about the 17-year-old company, which has 29 employees and has never turned a profit, but has 610 million shares of outstanding stock, more than even International Business Machines Corp. Comparator posted a loss of $1.85 million on sales of $90,161 for the last fiscal year.
Traders in the company’s stock said Wednesday’s activity marked the beginning of a gradual return to sanity surrounding a stock that has traded for pennies through most of its history.
“To me, it looks like the party is over,” said Stephen Wien, a senior partner at Wien Securities Corp. in New Jersey, who added that the volume and price may both continue to slide in upcoming days.
Investors are “starting to investigate what they’ve bought and realizing that they’re gambling on something that may never come to fruition,” Wien said. “As they learn more about [Comparator], they’re holding off.”
