January 23, 2007
By: by Larry Rulison, Business Writer, Time Union
HALFMOON - Shares of DayStar Technologies Inc. soared Thursday, fueling speculation among investors that positive news was on the horizon for the solar cell manufacturer.
DayStar (NASDAQ: DSTI) ended the trading session at $3.07 per share, up $1.05, or 52 percent. Shares were even higher than that in after-hours trading.
Even more surprising was that nearly 4.3 million shares traded hands, more than 10 times the average daily volume of the past three months. The Halfmoon company has about 6.7 million total shares outstanding.
DayStar spokeswoman Erica Dart said the company would decline comment.
The last time that DayStar's shares reached past 4 million shares in volume on any one day was back in July 2005, when the company's shares were trading as high as $16 per share.
After getting $15 million in financing from a hedge fund in May, DayStar's fortunes have suffered. The company's stock dropped below $9 during the summer, forcing it to put $3 million of that investment into escrow.
On Nov. 28, CEO and founder John Tuttle was replaced by Stephan DeLuca, the company's chief operating officer. Although Tuttle retains the title of chairman of the board, the leadership change was unexpected, at least outside the company. Tuttle had led the company's first-ever conference call with analysts and investors just two weeks prior, and the change was never mentioned.
In early December, DayStar filed a letter with the Securities and Exchange Commission dated Nov. 30 that showed that the company and its hedge fund investor, Castlerigg Master Investments Ltd., had failed to come to an agreement to restructure the $15 million investment and to reach agreement on a possible new transaction.
Such a deal would have been extremely important to DayStar, which lost nearly $15 million through the first nine months of 2006. The company says it needs $30 million to build a full-scale, 100,000-square-foot manufacturing plant in Malta that would allow it to make enough solar cells to achieve profitability. It is looking at a variety of ways to raise that money.
It has hired Tejas Securities Group Inc. of Austin, Texas to search for new financing, and it has asked the state of New York for help. State economic development officials, along with Senate Majority Leader Joseph L. Bruno, R-Brunswick, lured DayStar to Saratoga County from California in 2004 with an $11 million incentive package. The state has repeatedly pointed to DayStar as a shining example of the type of companies that are making the Capital Region the heart of what's known as Tech Valley. In his Nov. 14 conference call, Tuttle said the company was working with New York officials "to see how it is the state can assist us, as an early-stage company, in facilitating the construction of a new facility versus what we might do normally, which is to go occupy a existing facility and retrofit it for our needs."
Officials from the Empire State Development Corp., the state's economic development arm, did not return a call seeking comment. A Bruno spokesman also did not return a call for comment.
Some investors were speculating Thursday that the stock's surge was perhaps related to a pending announcement that Tejas had secured funding for DayStar.
"Any news on that is going to be huge," said Robert Schwartz, a DayStar investor from Berkeley, Calif.
A Tejas spokesman also did not return a call for comment.