With the expectation of Embark Health closing soon I was taking a look back at the transaction. As the Embark valuation was based on the 5 day trading average + a 33% premium to that average. Below is BEV's chart from approx. Aug 10th to Oct 20th. You see that impressive little spike right there in the middle. That just happened to be the week preceding the completion of the deal. The stock had been continuing its retreat down from the $1.47 high and then there is this anomoly of the stock going from a 30c low to a 38c high (21% increase) just for that week of September 13th to the 17th and then continues its fall to todays prices.
You've got to love how stock price coincidences just happen like that.
It's truly bizzarre.
Why is this relevant?
One reason being if the transaction price was based on a 33% premmium to the five day trading average then the share price average increase works out to a 12% bonus to the Embark shareholders. Whoop, whoop.
The other reason it's important is because if the transaction closes today (@ 0.175) and Bevcanna makes the market adjustment then Embark shareholders will receive
120M shares instead of 46.7M shares.
The dilution to existing shareholders is now a whopping
32%. Now none of this includes options and warrants (because we haven't been told that yet). So expect even more costs to arise with this acquisition.