Optionable Follow-up: Shares Likely To Open Lower, Don't Panic Sell

Saturday's edition of the New York Post had some new information that is likely to spell trouble for shares of Optionable Inc. (OPBL.OB). On Friday, the Bank of Montreal (BMO) reported that it lost $404 million from natural gas trades and would reposition its energy portfolio to a lower and sustainable level of risk, consistent with maintaining its core business of serving its energy client franchise. What's new is that it is now being reported that David Lee was largely responsible for those trades.

Though it is not clear if Lee is still with the Bank of Montreal or to what extent trading will be curtailed, what's fact is that commodity trader David Lee was responsible for the business his firm generated for Optionable... business that could disappear. The negative backlash would be significant because the Bank of Montreal represented 24% of Optionable's revenue last year.

The news will likely send shares lower at the opening bell Monday, but it would not be prudent for investors to hit the panic button and head for the exits, especially since the stock already fell 21% on rumors anticipating such news. Though the Bank of Montreal accounted for a large part of Optionable's total revenue last year, Optionable is a rapidly growing company that is continually adding new clients and attracting more business, meaning that it might not need to rely heavily on Bank of Montreal in the future.

The company will likely comment on the whole situation when it holds a conference call to discuss first quarter earnings Monday and assurances that Optionable will be less dependent on the Bank of Montreal than it has in the past will help provide a floor on the stock.

OPBL 1-yr chart: