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Shares of Taser International (TASR) are running hard on news that it won its 45th straight court case, and on news that it received an order from a foreign law enforcement agency (possibly England or France) for $1.4 million in stun guns, and another three orders from U.S. police departments.
The news was forceful enough to send TASR above $10 last week, which also brought Early Alert Trader’s January 2008 10 calls (LXFAB), recommended on May 3, 2007 at $1, to $1.45.
But the run is far from over, my friends… not after CEO Rick Smith exercised stock options to obtain some 504,000 TASR shares, which expires on May 29, 2007. And not after seven human studies concluded that the use to TASR non-lethal weaponry does not cause cardiac dysrhythmia.
Longer-term, we expect to see further appreciable gains from Taser once the media inherent hunger for sensationalism dies down. Says “The State of Current Human Research and Electronic Control Devices (ECDs)” report published by Ho, Johnson, and Dawes, “A comparative example of this sensationalism is seen in the following 2 headlines:
Man dies after being taken into custody in Livingston County
Man dies after Denver police shoot him with Taser”
However, according to the report, the reader of these two headlines is left to remember that a Taser was responsible for the death… even though it wasn’t true.
Says the report, “In the first case, there was no ECD used prior to the subject’s death. In the second case, an ECD was used prior to the subject’s death. So technically, both are truthful, but they are not equivalent. In order for them to be equivalent, the first headline should include that no ECD was used. However, this lacks the sensationalism of the second headline, which implies that the TASER is somehow linked with regard to causation.
In the second case, the cause of death was eventually listed as due to a lethal illicit drug level but this was not known for many weeks after the headline ran.”
However, we believe that once the sensationalism dies, future liability cases are dismissed, and more orders run through the door, our $15 price target could be dwarfed.
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