Tony1965

The Pegasus Brief

A shareholder's analysis of a stock market “bear raid” conducted by hedge funds and NASDAQ broker-dealers who sold “phantom” shares (a.k.a. naked short selling) of Pegasus Wireless (Fremont, CA) stock resulting in a share price decline from $18.99 to 50 cents (Stock symbol - PGWC). The major drop in share price forced the company to cease planned acquisitions intended to improve their competitiveness in the global consumer electronics market.

Why did the SEC and NASD stand by and allow an emerging American business in the wireless networking technology field leave the NASDAQ Exchange and Russell 2000 Index to possibly pursue the safe harbor of a foreign exchange?

May 05: $18.69 (182K) Daily high $18.99 - 52 WH
May 15: $15.38 (208K) Low volume pullback
May 18: $17.43 (195K) Retest of 52 WH - $18.10 high
May 23: $16.10 (148K) Selling on low volume
May 24: $14.98 (362K) Selling volume increases
May 25: $13.15 (567K) Selling volume increases
May 26: $11.14 (667K) Selling volume increases

Jun 06: $9.01 (531K) Selling volume increases
Jun 13: $8.67 (284K) Motely Fool "Pegasus' Broken Wings"
Jun 14: $6.74 (1.02M) Panic selling on very high volume
Jun 15: $5.83 (970K) Selling ends
Jun 28: $8.10 (266K) CEO buys 1.25M at $8.00 (SEC Filing)
Jun 30: $8.94 (7.88M) Longs buying/shorts covering

Jul 20: $5.24 (580K) Last day of selling on high volume
Jul 25: $7.00 (882K) Q2 Released - $25 Million Sales
Jul 27: $6.88 (543K) Motley Fool "Pegasus Flies Too High"

Aug 04: $6.03 (165K) Special warrants announced; 13 million shares retired.
Aug 18: $6.14 (131K) Motley Fool "Pegasus Squeezes The Shorts”
Aug 22: $7.60 (606K) End of 5 day move up
Aug 24: $5.82 (277K) Motley Fool “Don't Bet On This Horse"
Aug 28: $5.22 (362K) NY Post "Horse Feathers"
Aug 30: $5.15 (113K) Motley Fool "Who's Buying Now"
Aug 31: $3.43 (2.6M) Panic selling/short covering

Sep 01: $2.36 (3.62M) Panic selling/short covering
Sep 05: $1.51 (6.59M) Barrons "The Medusa Effect"
Sep 06: $1.67 (3.68M) Motley Fool "When Margin Makes Sense"
Sep 06: $1.67 (3.68M) Motely Fool "The Case Against Small Caps"
Sep 11: $1.36 (2.28M) PGWC Corporate update - selling continues
Sep 14: $1.17 (1.53M) Motley Fool "Apple's Latest Victims"
Sep 15: $1.02 (2.68M) Panic selling/short covering
Sep 18: $1.10 (2.06M) Panic selling/short covering
Sep 20: $1.09 (1.28M) $10 million sale of shares to CEO amended
Sep 21: $1.04 (463K) Motley Fool "Be The Sith Lord"
Sep 25: $1.04 (925K) PGWC Files to leave NASDAQ
Sep 26: $0.81 (2.93M) Motley Fool "Pegasus Clips Its Own Wings"
Sep 27: $0.69 (1.79M) Panic selling/short covering
Sep 28: $0.61 (5.54M) Forbes "Beating Fails" (FTDs)

Oct 03: $0.97 (6.36M) Forbes "Attacks On Pegasus" - extreme volume
Oct 04: $1.07 (2.24M) Longs buying/shorts covering
Oct 05: $0.94 (2.23M) Longs buying/shorts covering
Oct 06-23: (10.3M) Longs buying/shorts covering
Oct 24: $0.74 (277K) Motley Fool "You Have 23 Minutes To Decide"
Oct 26: $0.90 (1.26M) PGWC ends trading on NASDAQ
Oct 27: $0.70 (7.96M) PGWC begins trading on Pink Sheets

Nov 03: $0.65 (1.94M) PGWC begins trading on OTC BB; 0.74 Last
Nov 06: $0.71 (450K) Last trade actually $0.73
Nov 07: $0.73 (131K) Low volume
Nov 08: $0.66 (925K) Frivolous lawsuit announced after hours
Nov 09: - 10:30 AM - Panic selling in first hour; 0.60 low (500K)
Nov 09: - 10:48 AM - Company issues PR on Q3 & lawsuit
Nov 09: $0.70 (2.09M) Short selling to cap price/shakeout retail?
Nov 10: $0.66 (1.13M) Motley Fool "Pretty Woman, Ugly Stock"
Nov 13: $0.64 (1.26M) Short selling to cap price/shakeout retail?
Nov 14: $0.64 (1.98M) Short selling to cap price/shakeout retail?

Note: Date, Closing Share Price, and Volume are provided with
media release and personal analysis of share price change.

Suggested reading:

1. PGWC Press Release (Nov 9, 2006)

http://home.businesswire.com/portal/... 3&newsLang=en

2. Forbes web site (Oct 2, 2006) - "Attack On Pegasus"

http://www.forbes.com/wireless/2006/...03pegasus.html

3. Motley Fool web site (Aug 24, 2006) - "Don't Bet On This Horse"

http://www.fool.com/news/commentary/...ry06082418.htm

4. Barron's Magazine (Sep 5, 2006) - "The Medusa Effect"

http://www.smartmoney.com/barrons/in...0905&afl=yahoo

5. PC Magazine (Oct 11, 2006) - "Pegasus Offering Apple iTV Clone, Now"

http://www.pcmag.com/article2/0,1895,2024868,00.asp

6. ZDNET Web site (July 20, 2006) - “Announced: Multi-channel HD Streaming from PC to TV over WiFi”

http://blogs.zdnet.com/ip-telephony/?p=1188