Why Taronis Technologies (TRNX) Stock Is Falling

Taronis Technologies TRNX Stock News

Taronis Technologies Inc (NASDAQ: TRNX) is hurting early on in the market this morning. While recent news has been positive, short-side investors seem to be snagging onto a vote that will be coming soon. Nonetheless, they are doing nothing more than setting this stock up for a short squeeze. Nonetheless, the stock is down more than 20% early on today. Here’s what’s happening:

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Here’s Why TRNX Stock Is Tumbling This Morning

In a press release issued early this morning, Taronis Technologies said that it has filed a Preliminary Proxy Statement witht he SEC. The filing took place to notify shareholders that the 2018 Annual Meeting will bey held on August 20, 2019. 

In the release, the company said that it would be seeking approval for several matters. However, the only matter mentioned was approval for a reverse stock split should TRNX not meet compliance with the Nasdaq’s minimum $1.00 bid price rule. 

While reverse stock splits are only a cosmetic change, they tend to lead the value of stocks downward. So, with all of the strong gains as of late, the stock has been trading on highs and short-side traders saw an opportunity for potential gains, dragging the stock to the bottom this morning. 

Nonetheless, in a statement, Scott Mahoney, CEO at TRNX, had the following to offer:

We are filing this proxy primarily to, in part, satisfy the conditions of the short-term extension granted by Nasdaq last week. We are hopeful that shareholders will respond positively to our current business activities, which will be discussed in detail at our upcoming conference call on August 5th.

In addition, it is important to note that this potential reverse split is not tied to any financing. Taronis Technologies is expected to have adequate financial resources to fund its operations for the foreseeable future after the potential reverse split.

A Short Squeeze In The Making

A short squeeze tends to happen when a stock with a high volume of shares traded short starts to see gains. On these gains, short traders lose, so movement upward scares shorts out of their positions, leading to the gains compounding and generally shooting the stock up like a rocket. 

In my opinion, Taronis Technologies is gearing up for this type of move. The writing’s on the wall here. 

Recent news from TRNX has been overwhelmingly positive. Not only has the company achieved record MagneGas production, it did so using a single Venturi Plasma Arc Gasification Unit. Moreover, the company recently launched a second unit and has plans to launch a third in August. This will greatly increase production ahead. 

The company also recently announched that it achieved record revenue in the month of June and in the second quarter. However, that is not likely to be the only record breaking announcement considering the two new units launching and the revenue that they will produce. 

Moreover, TRNX announced a spin off of the Taronis Fuels arm of the business, which will lead to one share of Taronis Fuels being provided to shareholders for each share of the company owned. 

The company also recently announced that it has successfully completed a water treatment project in Clearwater, Florida, alleviating a lake of a blue green algae bloom and bacteria associated with it. The successful results of this pilot project not only generated revenue, but will open the door to more projects like it ahead. 

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The Bottom Line

The bottom line here is that the news of the vote on a reverse stock split has led to a frenzy among shorts. Nonetheless, with all of the positive news as of late, and the positive news that will likely come ahead associated with further record breaking production and sales, it won’t be long before shorts are squeezed like a tube of tooth paste! All in all, this is an opportunity in the making!

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