BIG GAIN HAS FIRM AT A LOSS; RISE IN SHARE PRICE DIFFICULT TO EXPLAIN.Byline: Ben Sullivan Daily News Staff Writer Golden Systems Inc., a previously little-known producer of computer power converters, said Thursday it could not explain a recent surge in its shares that pushed the penny stock Penny Stock A stock that sells for less than $1 a share but may also rise to as much as $10/share as a result of heavy promotion. All penny stocks are traded OTC or on the pink sheets. Notes: Penny stocks are highly speculative and risky. up more than 500 percent in a week. Since March 10, Golden shares have gone from 2 cents to a Thursday close of 10 cents. On Thursday alone, the stock rose 4 cents, or 66 percent, with volume of 627,000 shares, or 47 times its 30-day average volume. In a written statement, Golden warned investors about the recent trading, reminding them that the company is about a year behind in its filings with the Securities and Exchange Commission and has made no public statements since October. Golden Chief Financial Officer Harvey Marsh said the company was not encouraging the run-up. ``We felt obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to notify shareholders that we can't explain it,'' Marsh said. The only unusual activity at Golden itself is that the firm recently put up a Web site to advertise its products, Marsh said. Marsh said the company does not know whether establishing the site has led to the stock surge. ``Whether people are speculating that because of that the company is doing better than it had been, we don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. ,'' he added. The CFO See Chief Financial Officer. also speculated that discussions in Internet chat rooms about the stock could be spreading misinformation mis·in·form tr.v. mis·in·formed, mis·in·form·ing, mis·in·forms To provide with incorrect information. mis about the firm's prospects. Golden makes AC-to-DC power converters used in laptop Same as laptop computer. laptop - portable computer and desktop computers. The firm has about 15 local employees, mostly engineers, and about 500 employees in India, where its products are manufactured. In its fiscal year ended March 31, 1997, the most recent complete year for which it filed with the SEC, the company reported sales of $2 million. It has not filed a financial report for a period later than its third quarter ended Dec. 31, 1997. Golden has struggled since 1995 when Compaq Computers returned a large order of converters, claiming the devices were defective. ``That just about did the company in,'' Marsh said. ``We're a year behind in filings because we haven't had the money to pay attorneys and audit the accounts.'' Golden announced in October that it had hired new auditors after Arthur Andersen For the U.S. Supreme Court case commonly known as Arthur Andersen, see . Arthur Andersen LLP, based in Chicago, was once one of the "Big Five" accounting firms (the other four are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG), performing resigned from the job due to lack of payment. Marsh said he hopes to report earnings for fiscal 1998 within the next 30 days. |
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