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MGT Capital Traders Taking Some Profits After Bearish StreetSweeper Report

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MGT Capital Traders Taking Some Profits After Bearish StreetSweeper Report

MGT Capital Investments Inc. (NYSE: MGT) is giving up a large chunk of its massive gains on Wednesday following the release of a bearish report by TheStreetSweeper. The tech company has been one of the surprise darlings of the market so far in 2016, delivering a staggering 1,350 percent year-to-date gain, even after selling off by more than 6 percent in early Wednesday trading.

Much of the stock’s huge move came following rumors and then confirmation that antivirus pioneer John McAfee would be taking over as the new CEO of MGT. In an interview this week, McAfee said MGT’s new focus would be on “security and privacy,” and its first product will be mobile anti-spyware program D-Vasive.

MGT Capital short-sellers have been getting hammered by the stock’s meteoric rise. But one MGT short-seller, TheStreetSweeper, believes McAfee and MGT are all hype.

Related Link: Market Blows Off TheStreetSweeper's MGT Warning

“Though the press release doesn’t explain this, D-Vasive is a product of Mr. McAfee’s Future Tense Secure Systems, the company which will now be consulting for MGT,” TheStreetSweeper’s Sonya Colberg explains in the new report.

“MGT paid $300,000 cash and millions of cheap-o shares for the questionable privilege of taking Mr. McAfee’s languiching property and try to breathe commercial life into it.”

Colberg goes on to call on the SEC to look into recent McAfee promotional tweets and concludes that MGT’s stock is primed for a “tooth-rattling drop.”

Shares traded recently at $3.75, down 9.6 percent on the day.

Disclosure: the author holds no position in the stocks mentioned.

 

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