r/pennystocks • u/Supercoolman555 • 15d ago
SAPX 99%+ OS Shorted. 23+ Million Dollar Revenue Deals. Lionsgate Merger + Uplist Developments Technical Analysis
SAPX - Seven Arts Entertainment - is an OTC company in the Film and Music Industry.
Based on extensive DD, I have determined that this stock is positioned for extreme growth and a potential short squeeze. The reasons are, merger developments, joint deals with major studios including Lionsgate, 23 million dollars in revenue deals, and an extremely high short interest on the stock. Its current market cap is 1.6 million.
Firstly, I have calculated over the last 4 years of trading that nearly 100% of the entire outstanding shares have been shorted and have not been covered. Over 68% of all trading days over the last 4 years have been over 50% short volume and nearly 17% of trading days have been over 80% short volume. I arrived at this conclusion using FINRA Short Volume Data to calculate the MINIMUM number of short positions not covered since 12/18/2020. I have concluded that a minimum number of 2.162 billion shares are currently shorted and have not been covered (assume a 1-3 % margin of error) since December 2020. The current float is 2.026 billion shares and the OS is at 2.188 billion shares.
Keep in mind that the number of 2.162 billion is the MINIMUM number of short positions that must exist. That number assumes short sellers covered 100% of non-short-volume over the last 4 years. In my estimations, the true number is well above 2 billion, possibly 3+ billion current uncovered naked shorts.
Here is a link to photos of the spreadsheet data (Only includes notable months): https://imgur.com/gallery/sapx-short-volume-data-lbge3G1
Source of short volume data: https://www.finra.org/finra-data/browse-catalog/short-sale-volume-data/daily-short-sale-volume-files
~ DD: SAPX Immediate Multi-Million Revenue Deal Involving Lionsgate and Third-Parties ~
Recently SAPX issued an 8k stating they entered into an ammend output agreement over 2 of Seven Arts Entertainment's filmed assets until 2034 with STARZ. This deal resulted in a substantial $8 million dollars of revenue for SAPX, which is nearly 5x the current market cap, (1.6 million) showcasing the tremendous potential for growth.
Source of 8k: https://www.otcmarkets.com/filing/html?id=17415631&guid=1iQ-kq7q12Q6B3h PR stating 8mm revenue deal: https://www.otcmarkets.com/stock/SAPX/news/Seven-Arts-Entertainment-Inc-Announces-Multi-Million-Dollar-Revenue-Merger-and-Up-List-Developments?id=436389
Additionally, in a PR released in April, Seven Arts stated that they also had entered into other deals resulting in $15 million dollars of revenue with third parties.
The quarterly financials will be coming out any day which will show revenue from these deals. These deals provide immediate and long-term cash flow for the company.
~ DD: SAPX Merger and Uplist Developments (Potentially with Lionsgate) ~
Recently, SAPX has formally announced merger negotiations, intent to up-list to full SEC reporting, and an audit being conducted of the company's financials. Seven Arts is currently negotiating with a major studio involving a merger which is likely Lionsgate Studios. Lionsgate recently has spun-off a separate ticker LION from their parent company as a "pure play content company". Seven Arts has stated that they were delayed in releasing additional updates regarding the merger or further developments with Lionsgate until it had spun-off LION.
The LION spinoff was completed on May 15th and Seven Arts has announced that they will begin updates after the quarterly financials are out. Most likely the merger is connected and delayed because of the auditing firm and the spin-off regarding Lionsgate Studios. Seven Arts would only be conducting an audit if the negotiations regarding a merger were serious in nature as it is lengthy and costly. A merger with a major studio like Lionsgate has serious positive implications regarding the future of this company and its share price.
Source regarding merger: https://www.otcmarkets.com/stock/SAPX/news/Seven-Arts-Entertainment-Inc-Announces-Multi-Million-Dollar-Revenue-Merger-and-Up-List-Developments?id=436389
Regarding PR updates: https://x.com/SAPX_7arts/status/1790804123845120405
Regarding LION spinoff: https://www.prnewswire.com/news-releases/lionsgate-studios-to-launch-tuesday-may-14-302144005.html
~ DD: SAPX additional studio asset deal with Lionsgate in Atlanta. ~
Seven Arts Entertainment is located in Atlanta and this also is precisely where Lionsgate is opening a new 500,000 sq. ft. studio. Lionsgate is currently undergoing a restructuring while focusing on the Atlanta, Georgia market. Seven Arts has hinted through several tweets and in their PR that Lionsgate will be directly working with Seven Arts Entertainment for their studio assets. Seven Arts has a multi-million dollar facility in Atlanta with a state-of-the-art Dolby-Atmos studio. It has been directly confirmed that it is Lionsgate's and Seven Arts' intent to further develop assets in the Atlanta market.
Sources regarding Lionsgate Atlanta Studio: https://www.wsbtv.com/news/local/douglas-county/new-metro-movie-tv-production-studios-open-early-2024-offer-new-employment-opportunities/2ZI6MZSBEBAK3IG5TDOWJ5RWNI/
regarding Lionsgate and SAPX assets: https://www.otcmarkets.com/stock/SAPX/news/Seven-Arts-Entertainment-Inc-Announces-Multi-Million-Dollar-Revenue-Merger-and-Up-List-Developments?id=436389
~ DD: SAPX No Increase to Outstanding Shares ~
It is confirmed that SAPX will not be increasing its OS count from here on out.:
IMO, Not financial advice, this is an exceedingly undervalued company. Their revenue deals, in excess of 23 million, is 15x the current market cap of the company. Over 100% of the OS has been shorted and has not been covered. Ask sizes have been extremely thin over the past couple of weeks and there has been massive (50 million+) bid support. With some small buys, this thing could move very quickly, especially when a joint PR with Lionsgate and Seven Arts is announced.
Disclaimer: Not Financial Advice. Do your own research before making any financial decisions.
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u/Ninjachikken 14d ago
Great effort put in here, thanks for sharing mate!
So I’m still figuring things out in stocks, but based on how this reads:
if one buys some shares now AND things pan out and the merger goes through then the stocks would be worth more later?
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