RE:Insiders dumped $41 million dollars in stockwoody999 wrote:
CEO and a director.....Explain that!
I always sell when this happens
Perhaps because of a tendency fixate on simple facts and then jump to conclusions?
A more thoughtful investor might step back and try to understand what might lead these company founders to give up some of their treasured assets. Here goes:
- Jan 5: stock closes at $5.13. a NR comes out announcing a $50M financing at $4.85
- Jan 6: the offering is increased to $75.2M to meet excess demand. Stock closes at $5.10
- Jan 15: the offering is again increased to $86.4M which now includes the full exercise of the overallotment option by the underwriters. Canaccord Genuity Corp. and Echelon Wealth Partners Inc. led the syndicate which included Desjardins Capital Markets, Eight Capital, Raymond James Ltd., Laurentian Bank Securities Inc., Paradigm Capital Inc. and Scotiabank.. Stock closes at $6.31
So we see that the demand for stock was very high. The reason was simple: CTS was executing its business plan flawlessly PLUS it had been announced (November) that CTS would be graduating to the TSX where more institutions and funds could now own.
This move to the TSX was now expected at any time ... but the demand for stock for some institutions/funds could not be satisfied. The company could not issue move stock without going through another time-consuming prospectus. How now to take advantage of an opportunity to satisfy the disappointed institutions while also putting the stock into stronger hands andcreating positives vibes on the 'Street'? Where could we find such a supply of shares legally in a timely manner? Hmm-m-m ...
There was only one solution - convince someone, that for the good of the company, might be willing to part with some of their shares. We now know the answer of who answered the call!
- Jan 18: stock closes at $6.50
- Jan 19, 0800: CTS co-founders Maine and McMillan (who had never sold a single share previously) agree to part with 3.5M shares @ $5.90 each to help satisfy the outstanding demand.
I have no way of knowing if that's exactly what happened here but I suggest that given the series of actions described above, it's probably more likely than your simple explanation of "executives dumped".