Antibe (ATE) price action holds lessons for Datametrex
ATE has been on a roller coaster the past few days running up from .24 just two weeks ago to .80 on positive Ph. 2 clinical trial results for their lead drug candidate ATB-346, a pain reliever going head to head against incumbent naproxen and soon to be available on a store shelf near you.
After running up to .80, the SP has dropped precipitously back almost 50% to just .48 even while excitement for the excellent results lingers and retail buyers are swallowing up shares... why?
One word: WARRANTS.
Antibe did multiple low-priced PPs over 2016 and 2017, the largest of which was for 50 Million units and other smaller PPs for 4-5 Million units each... each of them with 10c shares and 15c warrants. This massive pullback is the warrant cows coming home. Holders exercising their 15c warrants and selling basically at market tanked the SP from .80 to .48 in less than 24 hours.
DM is already beginning to feel the burn from the free-trading churn as 57 Million shares bought for 10c begin to hit the market. But worse, when/if they do announce the spectacular news everyone's waiting on, there will then be 57 Million 15c warrants also hitting the market, dragging it right back down. I have no idea how long it takes to burn through 57M shares and then 57M warrants. We could be playing this game all summer.
It's a nasty cycle but that's what happens whan management basically "goes on the stroll" and peddles their assets...
Plan accordingly.