Short squeeze
The key here is that the aggressive shorts start realizing that the actual secondary book at these levels should be considerably oversubscribed, particularly if the company decides to finance close to the $10mm than the $15mm figure . As soon as these guys realize that they might not get any or part of their allotment, we have a chance to see the bid come back here in a big way.
Remember, there's been virtually no incentive for existing or prospective longs to be buying on the market when they know they can get most of what they want at the secondary. As soon as the book has built to the point of being squeezed, the bid will come back in the market... This is a grossly oversold TECHNICAL condition very similar to the last time we hit these levels and bounced back to close to two dollars..... especially because we should be fuelled by meaningful and substantive news flow.
The big difference this time around is the fact that we have multiple firms involved in the financing, shopping to a wide variety of clients. I'll certainly give Nicole and Pierre credit for this, they have been out to see ALOT of institutions and they have been working extensively with all of these firms analysts and a number of others modelling the next 18 months. They have generated alot of interest and awareness about Prometic. I would expect positive updates from virtually all of these guys in the underwriting group.... which will only generate further post financing market interest.
Don't get me wrong, the company has totally mishandled this financing in terms of disclosing it 45 days before they file the prospectus, shopping it around being too cute and also watching the market price drop by over 50% . That however doesnt change the fact that they price at these levels is good value and we will go significantly higher near term from these levels.