June 26, 2008
Knobias Clip Report (06-26-2008)
By admin
Submitted By Knobias ClipReport
VEXP: Shares Gain Over 200% on $30M Multiyear Contract
Wednesday’s session was a bit mum while many awaited the Fed’s decision on interest rates. Most felt that the Fed needed to raise the rates to stay ahead of the inflation curve but knew they wouldn’t. With that in mind, that same group was more concerned with the rhetoric and the Fed’s outlook going forward. They were pleased with the talk at first. “Downside growth risks have diminished somewhat and upsides risks to inflation expectations have risen” were the magic words that investors wanted to hear. Defending the dollar and controlling inflation would seem to be on the Fed’s agenda going forward. But they also added into that rhetoric that “The committee expects inflation to moderate later this year”. With somewhat contradictory statements, many felt the Fed could be just jawboning to buy some time. Even so, following the news, the Dow jumped over 50 points before beginning an afternoon consolidation on fears that the Fed may not actually follow through on its stance.
One name in the small cap space also reported offsetting news to investors. Velocity Express Corporation (VEXP) is engaged time-definite nationwide delivery networks, providing a national footprint for customers desiring same day service throughout the United States. The Company’s services are supported by a customer-focused technology infrastructure that provides customers with the reliability and information they need to manage their transportation and logistics systems. Velocity uses a proprietary package tracking system that enables customers to review the status of any package via a flexible web reporting system.
Before the bell, the Company announced that its Nasdaq listing was in jeopardy following its common stock trading below $1.00 for 30 consecutive business days. The Company will have 180 calendar days until December 16, 2008 to regain compliance with the minimum bid requirement which will require that the bid price of the Company’s common stock close at $1.00 per share or more for a minimum of 10 consecutive business days.
The Company’s CEO did note that they were on track to meet guidance for positive EBITDA in the June quarter and were excited about the sales pipeline.
Thirty minutes after announcing the Nasdaq delisting notice and the comments from the CEO, the Company reported that it had been awarded a multi-year contract valued in excess of $30 million to service Stage Stores, Inc’s, Peebles brand stores throughout the Midwest, Northeast and Southeast. Velocity will be providing a total transportation solution which will include daily store replenishment and vendor inbound transportation services to 310 Peebles stores.
Following the news, shares exploded over the $1.00 threshold and gained over 214% on the day to close at $1.10. Over 1 million shares traded. With the positive news, shares would need to hold that 1.00 level to keep their Nasdaq listing and with so many entering the name evident by the volume and the limited number outstanding (2.83 million), the name is certainly one to follow. Investors would be wise to watch.
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