Trading on the 15thHello All. I'm a silent long, in since the beginning. I rarely post, but I appreciate reading your comments. I am still greatly mystified by the events of the 15th and looking for sensible explanations that will satisfy my need for understanding. It was a huge amount of dilution, from my position, and would require very strong justification. Dilution that would also impact management holdings. I am hoping it was justified by what will unfold.
Discussions on ATMs suggest that they are a good way for companies to trickle shares into the market without impacting price very much. 33M shares traded in one day, 27M in the pre-market, is astronomical (unheard of?) volume. Something like 100x daily average volume. The large majority of it in the pre-market, where relatively few sellers and buyers are present. In fact many brokerages only allow limit orders in after hours trading because of the associated volatility created by the thin market. Some don't even allow it.
So if ONC (or their agent) was flooding the pre-market with ATM shares, it should have cratered the price. They could use limit sell orders to establish a floor, but they would quickly exhaust the buy orders with those volumes, in that thin market. Unless there was a pre-arranged buyer present with the means and desire to soak up all that volume in a pre-arranged price band. Which smells like partner acquiring a significant stake in the company. (Q: Why not just do a bought deal financing? Possible A: Urgency?) My understanding is that they have to declare their intentions within 10 days when they cross the 5% threshold (Nasdaq). 5% would be roughly 4M shares, a fraction of what went down.
I would appreciate any other thoughts on what happened that day, and how it ties in to what may be going on behind the scenes now.