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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Imax Interest Could Get a Sequel

Editor's note: This Stocks Under $10 alert was originally sent to subscribers Nov. 20 at 3:59 p.m. EST. It's being republished as a bonus for and readers.

A couple of twists in the plot have sent shares of Imax (IMAX) tumbling over the past four months. Along with its stock price, the credibility of the company has been shattered. But several upcoming events could make this stock a speculative buy for risk-tolerant investors as more information unfolds about the company's legal problems.

Earlier this year, when shares were trading around $10, the giant-screen movie-system maker offered itself for sale. Initial interest came from entertainment titans Sony (SNE) and Time Warner (TWX) as analysts speculated that Imax shares were worth anywhere from $12 to $14.

But on Aug. 9, Imax announced that it had failed to find a buyer and was also being investigated by the Securities and Exchange Commission for the timing of revenue recognition. Shares plunged that day and then continued to fall over the next two weeks to $4.43, dropping more than 50% from their Aug. 8 high as a slew of shareholder lawsuits ensued.

Then on Nov. 9 -- just when investors thought that the worst-possible scenario was priced into the stock -- Imax reported a third-quarter loss of 28 cents a share, 27 cents worse than the analyst consensus estimate. Shares fell an additional 20% on the news, where they remain with the stock recently trading at $3.41. Even at this price, Imax shares are very risky, but several catalysts could make for a speculative buy down the road for investors who can handle the risk.

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