Typical Private Placement Stock Manipulation for ELBMI have seen this game played so often with private placements. Prospective subscribers sell the stock short right after the PP announcement at an inflated price compared to offering price. Then when the offering closes they replace the borrowed stock with shares from the private placement.
Usually the trading gain is minimal because the share price drops after the private placement is announced to near the offering price. In the case of ELBM it was kept artificially high with the LG Energy Supply announcement facilitating the huge selloff of over 5M shares on August 9th (2 days before deal closing) that dropped the price right down to the $1.10 PP price. It is always the long retail investors who get screwed in these private placements.