OVTI: Man it's a pain in the ass

This one was due. I am really bummed on OVTI and specially their arrogant management.

My sentiments on this one remain the same BUY. Nothing changes in OVTI but two things.
1. They have been accused of lying on the conference call by Herb Greenberg and the Jefferies analyst. 5.9 million revenue recognized from written off inventory. I clearly remember when asked about revenue contribution from written off inventory, the answer was "nothing substantial". To make things worse, there is no attempt from management to clear their name or come out and say something with regards to how they were misinterpreted. Herb Greenberg is a hedge fund owned scum in my opinion and has made some unbelievably bad calls such as shorting NFLX at 10 to cover at 4. I think they were all waiting for something to latch onto after earnings (short ratio is very high) and the 10Q gave them the chance and a good one to that.

2. Since management is too arrogant and never responds to Herb and the Jefferies guy, Herb takes a chance and adds the 5.9 million straight to the profits and cuts 10 cents off the earnings.
Sure they made a mistake and stock was punished. The stock has been kept down really well after all this trashing.

One interesting observation is that the Oct Puts volume is 10,404. Compare that with the 12.50 put volume 1077 or infact even the Sept calls / puts that expire on Friday. Traders often protect their positions by trading options. If they expect the stock price to be over 15 they would buy puts to protect themselves and ofcourse buy a lot of stock or begin covering. The option prices are the best today for these guys due to the low price.

If you believe the above conspiracy theory then the stock should be over 15 in less than a month :)

I am holding on for now and have infact closed some other positions to support this one.
Good luck!

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