TerreStar Corp (PINK: TSTRQ) – a satellite telecommunications company that came crashing  to the ground once it received a delisting notice from the NASDAQ and then fell further as it filed for bankruptcy on Oct 10, 2010. This is a stock that was trading as high as $2.95 in 2009, but as low as a penny on June 29!

Some HUGE NEWS has surfaced in recent weeks and on June 28, Dish Network Corp (NASDAQ: DISH) submitted a $1.375 billion bid offer for TSTRQ! This acquisition will be proposed in court for approval on July 7.

Now, we still have yet to confirm what happens to commons… In the past, there have been many instances where commons in similar deals were completely wiped out to start “fresh!” I personally don’t know how that is even legal, but this can be a hostile environment. Remember that TSTRQ still has a little over a Billion Dollars in Debt!

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The chart looks amazing though and the current price per share is ridiculous, relative to the past. Keep your ears to the ground for news on this because a halt would be disastrous!

Technical Indicators:

• TSTRQ has rocketed off its support at $.01 and now heads towards the 20 day moving average around $.04. The 2 day average PPS is $.023, possibly acting as either a support line or gravitational pull.
• The RSI is shooting out of oversold directly into the buy zone at 40!
• The MACD is showing a potential golden cross, but could still take a couple of days to actually converge.
• The ADX is virtually mirroring the MACD, but both are becoming positive indicators.

The Bottom Line

TSTRQ has traded much higher than $.01 – $.03 and innumerable shares have been traded above a quarter! However, considering that the float is an estimated 108 million shares, about a 1/5 of those shares were recently traded at an average price of $.023! The biggest worry isn’t that there are so many cheap shares though; it’s that commons could essentially be wiped out of existence!

Trade with caution and know that this could be a huge bagging opportunity… I mean that both in reference to holding a worthless bag and selling for a multi-bagger!

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Good Luck,

Ian Decker

Disclosure: No Positions

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