Valeura Energy Inc T.VLE

Bought deal overhang

[goldwatch69]

In a bought deal, brokers buy shares from the company, and then resell them to investors. They will keep trying, inventory the shares they now own, or eventually sell them on the market. 

Generally the price drops to the bought deal price for a while then carries on what it was doing, as most investors look at the chart and stop their research there.

(from various sources)

Selling pressure should be over today or early next week.

[cyber37]

Yes, all new shares following equity issue need to be allocated (locked in) first before market learns to live with any dilutive effect. In our case (VLE) this ‘bought deal overhang’ should be rather minimal because all new shares went to brokers rather than ‘free market’. Since brokers have control over new shares price some of that negative pressure is alleviated and managed especially with a