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I have explained it as carefully as I can. I am trying to be as helpful as I can in response and educate you, not insult you. But to persist on a bankrupt theory is ignorant. Please drop it. You're not well informed on this particular topic.
Agreed. I feel like we are banging our heads against the wall here. After doing numerous PPs I know they are restricted from resale until registered with the SEC. What is not clear about this? It is an incorrect premise to assume they are unrestricted. Why keep talking about shorting theories when it is clear this is NOT HOW IT IS DONE.
Shmolton, the 8K does not say they are not restricted. Convention is that they are until registered for resale. You cannot infer from the 8K they are free trading.
But the price was already announced so even if it closes tomorrow the terms were already set. That would mean there is no correlation between someone shorting this week to affect the terms of the private placement.
And in regards to the weeks preceding the private placement announcement, the stock was trending up and the deal was announced after the stock spiked from the 90s well into dollar territory due to the Schlumberger PR. If there was any shorting leading up the financing it was done by NITE and PERT as others already know and I consider that unlikely to be related in any way to Ironman nor did it have any effect whatsoever.
Also, you offer this equation:
1. In the weeks BEFORE a PP
2. Financiers short BEFORE receiving stock
3. Financier covers with new stock
How is that? The stock is restricted, I can almost guarantee that. How do you hand your broker a non-trading stock certificate to cover your short with? You can't.
Plus, if somebody is going to short and cover lower they can pick their victims completely outside of financings and make their money if they pick a bloated share price that has to come down 80% like you suggest.
There is no inherent reason to suggest that would or could be done here in relation to a fixed share price financing done by Ironman which gets their shares tomorrow.
I can see stocks MAYBE (but they better be right in their strategy) being shorted OR sold in these scenarios:
1. Since PPs are offered at a discount to market price (preceding 10 day average for example), a person wanting to go into PP and who holds free market shares at a much higher price may dump them to raise the funds for the PP. Plus the PP may be worth more to them when warrants are included.
2. Whomever wants in on PP who knows the raise is not fully subscribed may short it IF (IF!) the pricing terms on the PP are still liquid and not fixed, but will be adjusted according to a floating time frame. If so, then dropping the price could make the PP cheaper. But since most PPs are offered at already predetermined prices this is not going to be very common.
In sum, your basic assumption that someone will cover with private placement shares when the PP is just closing is incorrect. It will only be the case with unrestricted stock. If you determine DPDW sold unrestricted stock only then could your theory be correct. But it is highly improbable experienced management like this would shoot themselves in the foot like that.
Hindsight actually points to an entirely different situation. Ironman wanted in. The company had a pipeline of news. They said sure, but you're going to have to pay some more. Let's talk turkey while we release our PRs. Ironman sees the market conditions and knows if they want 3M shares they can't do better on the open market by a long shot, so they agree to 0.96 a share.
Ironman seems to have a record as an investor that goes long on a stock. If they were to be involved in any shenanigans in the trading it would be to shake out shares and accumulate some more in all probability. And if that for any reason involved a fast short at 1.75 in order to shake loose shares lower like the last 24 hours then that would have been a very quick short cover and then further accumulation. But to short to cover with PP shares is extremely improbable at this time.
They have zero incentive to short whether they are restricted or not.
But as someone who has done numerous private placements myself I will say they are almost surely restricted until they are registered for resale with the SEC by DPDW.
I mapped this all out earlier.
If the company does not register within a year then Ironman can sell them via a Rule 144 filing.
But regardless of that what is the incentive to short after buying shares at a fixed price? I don't get your logic.
Private placements at a fixed price almost certainly sold restricted stock. You're talking about toxic financing and are mixing up penny stock convertible debenture logic with straight up equity financing. When the incentive is there to have your conversion be due to you with MORE shares because you drove the stock down to a lower price by shorting that is toxic financing. There is no such thing going on here. What are talking about?
Why would anybody immediately start shorting against restricted stock now? That makes no sense to me. Please elaborate
I'm not reading any more into it than I've already said. Mostly, I've posed a basic question about why they took an unorthodox approach to announcing a Naz application.
But as far as being in the stock is concerned, this is what I see:
If everything is being done properly and uplist and price gains to qualify for it happen, then you are sitting on an easy double or more from here.
If the uplist approach hits a snag, look out below. You could lose 50% of the share price quickly.
This is what you are facing. There is very little middle ground now that they've set themselves up for either a run to $4 or not, but the market will not sit on its hands statically at $2 if there are no proper indications which way things are headed.
And that is what I noted today when I said some will sell and go to the sidelines to watch how it plays out before they re-enter again.
If it drags on without any clarity then it could easily drift downwards. But there could be plenty of great things in the works and it starts moving upwards to new highs. I hope it does. I'm just an observor at this point. Good luck with it.
I will be looking to free up cash in the coming weeks to find my own additional entries too and average up. We are shaking our own trees here and somebody who loaded up is exiting. Nothing you can do about it, but pick your own spots. Those who want to sell, lock in their profits and the dip gets accentuated because they don't want to lose their gains and they follow too. So you had your first big profit taking event today after a major move upwards. This will work to many peoples advantage before long. Good luck to those exiting today.
He who hesitates ...................
loses buying opps
Fine. It doesn't bother you, but the market is telling you it bothers them.
And somebody may have very inadvisedly put in a market sell. If so, Doh!
There is your buying opportunity folks. Somebody took a fast, sloppy dump (really badly done, must have been a really lazy personal broker doing it for a client or they are a clumsy retailer with no exit skills).
That has absolutely nothing to do with whether or not the stock was .20 once and there are profit takers.
It has to do with a dubious uplisting PR when the stock was at half of the requirement price and now the stock is falling. That shines a bright light on management conduct, motivation and questions the basic intelligence guiding such a premature public declaration. It is not normal and puts them under scrutiny.
Well, it is not essential that particular instinct about developments being so close at hand be true for me to be very right with DPDW. Time frames are elastic to me. If I see $20+ coming I don't care if it gets accelerated faster than expected.
See you on TBLC. They just closed on additional funds and are about to expand yet more. It is a great long term portfolio stock. It is a mining conglomerate in the making.
Looks like some people are selling and taking a wait and see attitude just in case that Naz app PR was a con job. Surely they were right to sell if the stock starts going down after that PR and the share price should be $4 not $1.83 and declining.
Something smells wrong here.
Yes Jay. You do need a lull for the newly enlightened to come aboard as investors. Its all good. Any big news now and that opportunity to buy in like today may disappear in a flash. I have a gut feeling something big is coming that will accelerate all of our hopes and expectations for the time frames on this company's evolution, but that is just a hunch from watching how this trades and the many different non-OTC type MMs popping in and out of the L2s trying to accumulate shares for their clients.
I did say many of them will be gone by $2. Here is where you see people falter and sell out. Then the remaining profit takers will exit between $2 and 2.50. Most that remain after that will ride it for the longer haul. Right now the trading is healthy and part of the scenario before it goes higher. Toodles flippers.
They'll get some little fish with short attention spans.
Different stocks, different strokes. DJRT will pass many stocks without most people noticing, but it may do it without the fireworks of a DPDW. Different situations, different stocks. The OS here is much better though and the float is really small so once this gets rolling it can move up very well.
The PP should most likely be like the starting flag at the Indy 500. The engines will be vrooming waiting for it since it means the last hurdle to building the facilities has been cleared and GORO has the green light to start calculating its forward valuations by the market in anticipation of bringing the Gold out of the ground in 2008.
As I said before, review the one and two year DJRT charts and compare the recent rise in share price to past spikes. I did say twice before this was not a spike, but a new plateau from which the stock would begin a new long term ascent. Well, it has happened. The chart shows a new pattern now, not a spike, but a new trading range has formed. Take heed.
Shhhh! Some people still want a few more cheap shares to fall into their baskets first.
Good post. You will prosper if you continue to apply that level of self inquiry to your investing process. iHub has good pickers and it has way more garbage hunters and pumpers. Learning to follow your own standards takes time and mistakes. All I'll say is I'm partial to quality microcaps. I strayed into a Pink just once and never will patronize one again. If you have $10,000, I believe you will be a millionaire within 5 years if you avoid the pump and dump gutter stocks and seek out quality and solid long term gains. If you had just 2 consecutive 10 baggers each held 18 months each, that $10k will be $1M in 3 years (taxed though so # 3 would take you into multi-million territory). There are people who will trade junk for years and never make it. They win a few and lose a few. Sure, some made a million on QBID, but did they then learn to invest it well? Few hit it big on the pink sheets and those who do are often on the inside of the pump. Many pump out of desire to succeed and are innocents and I've known them, but at a certain point it is best to avoid the dodgy stocks and go with winners on their way to significant gains. The problem on iHub is people want triples all the time, but are they plunking down $100k on those plays. Largely not. I want to put my funds into something I can grow with. Leverage of my capital makes me significant returns with doubles, not to mention 10X. But getting 10X on a quarter million investment over 2 years is a whole other kettle of fish from people flipping $5k to get to $10k. In the beginning, you do need to trade to increase your capital, but even at those levels what is wrong with making 5 times your money a year and taking a patient path to millions? Nothing probably, but many penny stock traders get their minds corrupted by the thrill of the chase and never stick with anything. Good luck to you
Actually I have already thrown big bucks at it, at least compared to the average retailer. But if I come back in 6 weeks and decide to buy more and it is 2.50 that is fine. My cost basis may soar from sub-$1 to $1.50 a share, but if I am convinced I will make 10 to 30 times my money from that price within 2-3 years it may be worthwhile to average up.
I should add that stock picking is not 100% science no matter what amount of DD you do. In the end, you are betting on a management team and humans are not 100% predictable. You just want to be right about them and their intentions and abilities overall and that will override some glitches when they do occur.
And that means you can be very thorough, but you still need a little luck to have picked the right company. And sometimes your luck ratio increases because you have an accumulated reservoir of experiences that powers your intuition on where to put your money.
Yes, that's right, to some degree intuition does matter. I tap into it in particular when I first learn about a stock. I usually know within the first 15 minutes whether I've got a positive feeling about a stock. Very occasionally I get a literal buzz when I review a new stock pick which is how I felt upon discovering DPDW 2 weeks ago.
I did not scale in. I loaded up the morning after I discovered it the night before. I knew this was going to take off. I probably could explain it in further detail by writing another zillion words because it is not really all that fuzzy, but based on accumulated experience married to my own personal sensitivities and awareness of my own tendencies, strengths and weaknesses as an investor. That means this was the right stock for me and the timing was perfect. So I got in large and did it fast because I basically knew the opportunity at my entry level was going to be limited.
I try to share my experience in various musings about how a stock is behaving. But some things can't be reduced too easily, so it comes out in bits and pieces. It has been stated that mastery of any discipline requires the assimilation of 50,000 discrete pieces of relevant information. I am far from that point, but it starts to click and recognition events like finding DPDW are sometimes instantaneous and thus a bit intuitive.
Nope. I deal in hypotheticals and would not issue a target normally or at least not until I develop a much greater familiarity with the company. I have stated I'm probably holding TBLC until it hits $30 at least and that I can wait for that to happen. But I've been in that stock for close to a year and have a greater handle on what is going on there so far. Maybe I'd venture a serious guess on DPDW by this Winter. We'll see. For now, it looks great from where we are and seems poised for higher base prices which is plenty to work with for now. We may be sitting on a monster. That is a great feeling to have but it is no substitute for ongoing DD. I expect to seek out management myself by the end of next month. That will determine a great deal about whether I stay long for a multi-year hold here or not. Good luck
New York Times article
October 9, 2007
A Quest for Energy in the Globe’s Remote Places
By JAD MOUAWAD
HAMMERFEST, Norway — For a quarter-century, energy executives were tantalized by vast quantities of natural gas in one of the world’s least hospitable places — 90 miles off Norway’s northern coast, beneath the Arctic Ocean.
Bitter winds and frequent snowstorms lash the region. The sun disappears for two months a year. No oil company knew how to operate in such a harsh environment.
But Norway has finally solved the problem. The other day, on an island just offshore, a giant yellow flame illuminated the sky here. It was just a temporary flare for excess gas, but it signaled a new era in energy production.
Across the bay from this small fishing town, where reindeer wander the streets, one of the world’s most advanced natural gas plants is coming to life.
Within weeks, gas will start crossing the ocean in specially designed ships, feeding into the pipeline network for the American East Coast. Before Christmas, furnaces in Brooklyn and stoves in Washington will be burning the gas. It will be the first commercial energy production from waters north of the Arctic Circle.
As global demand soars and prices rise, energy companies are going to the ends of the earth to find new supplies.
In Kazakhstan, petroleum engineers are braving wild temperature swings in the shallow waters of the Caspian Sea to tap the biggest oil discovery of the last 30 years. They are drilling wells six miles deep in the Gulf of Mexico. And on the island of Sakhalin, off far eastern Russia, they have drilled horizontal wells through miles of rock to produce oil from a stretch of ocean notable for giant icebergs.
But as the industry extends its reach, the quest is becoming more arduous. The cost of producing new oil and gas is rising fast, and companies are troubled by worsening delays. Drilling rigs are scarce. Engineers, geologists and petroleum specialists are in critically short supply.
And the politics of oil and gas are getting trickier, with producing countries demanding a bigger share of the revenue and growing angry about project delays that postpone their payments.
Industry executives say their ability to keep up with global demand is badly strained.
“We’re facing bigger risks and bigger difficulties when we go into new frontier regions,” said Odd A. Mosbergvik, a senior manager at the dominant Norwegian energy company, StatoilHydro. “But this is why the oil industry is for big boys. It’s a big gamble.”
The industry’s new reach is shifting the economics of energy extraction. According to a recent study, discovery and development costs, a key indicator for the industry, tripled from 1999 to 2006, to nearly $15 a barrel.
Last year alone, companies spent $200 billion developing new energy projects worldwide, according to the study by the consulting firms John S. Herold Inc. and Harrison Lovegrove — an amount larger than the economies of 147 countries.
These higher costs mean that the industry needs higher energy prices to finance new projects. They are also constraining its ability to expand quickly.
“There are no easy barrels left,” said J. Robinson West, chairman of PFC Energy, an industry consulting firm in Washington. “The only barrels are going to be the tough barrels.”
There is plenty of oil and gas still in the ground, energy executives say. But global consumption is rising so fast that they must keep looking for new sources. Despite worldwide concern over global warming and the role of fossil fuels in causing it, United States government specialists project that global oil and gas demand will increase by some 50 percent in the next 25 years.
At the same time, the big discoveries of the last three decades, like those in the North Sea and on the North Slope of Alaska, are drying up. This is leading oil companies to remote places like Hammerfest.
The United States will need to import about a fifth of the natural gas it uses by 2030, mostly in a liquefied form shipped across the seas in tankers. Such imports are expected to swell more than sixfold from 2005 to 2030, according to the Energy Information Administration. And consumption is rising fast in the economically booming Asian countries.
Producing oil and gas in polar regions is not entirely new, of course. Russian engineers have been doing it in Siberia for decades, with mixed results, and Alaska’s North Slope was long the most important United States oil field.
But those fields are on land. The Norwegian field is the first Arctic project to tap oil and gas reserves far offshore, in water more than 1,000 feet deep, where traditional exploration methods would be too costly.
The gas field, 340 miles north of the Arctic Circle beneath a stretch of ocean more commonly known as the Barents Sea, is called Snow White — Snohvit in Norwegian, where energy projects are named after mythical characters. Though the field was discovered in 1981, oil executives long considered Snohvit out of reach, because of the Barents Sea’s shifting ice packs, brutal waves and extreme cold.
“This is considered an unfriendly place, even by Norwegian standards,” Mr. Mosbergvik said.
Another big problem the engineers faced here was that Snohvit is situated hundreds of miles from Norway’s traditional pipeline network.
Over the years, Statoil considered many ways to get at the gas, including huge offshore platforms armored against the waves, but discarded them as too costly. Building a vast undersea pipeline that would take the gas south along the country’s stretched coastline was also out of the question.
Statoil engineers eventually came up with an ingenious solution. They installed production equipment directly on the seafloor, with no rigs breaking the surface. The wellheads are linked by 90 miles of pipe to a small island just off Hammerfest. Anti-freeze is injected into the pipes to prevent the natural gas from clogging on its way to shore.
On the island, Melkoya, Statoil built a processing facility to separate the brew of natural gas, oil, water and carbon dioxide that flows out of the field. The natural gas is cooled to a temperature of 260 degrees below zero, shrinking its volume to one-six hundredth and turning it into a liquid that can be shipped in tankers.
Construction of the liquefaction plant over the last several years involved 22,000 workers, one of the largest industrial projects in Europe, and cost nearly $10 billion, up from $6 billion when the project was begun in 2002.
“We did not have the experience to operate in an environment like this,” Mr. Mosbergvik acknowledged.
The field is so large that it could eventually supply nearly 10 percent of the demand for natural gas demand in eastern states of the United States. Dominion, an energy company, has expanded a gas import terminal at Cove Point, Md., to accommodate the Arctic gas, according to Donald R. Raikes, its vice president for marketing and customer services.
By the end of October, Statoil’s gas will begin flowing through a network of pipes to a stretch of the country from Maryland to Massachusetts, the largest consumer market in the United States, with some 16 million residential customers and 5 million industrial clients.
With the plant nearly ready, Statoil maintains that the Barents Sea could turn into a major oil and gas region in coming decades. Indeed, the world’s fast-rising use of fossil fuels, by contributing to global warming, could eventually make the Arctic more accessible for oil and gas production.
In Hammerfest,residents have welcomed Statoil’s project, hoping it will offset declines in fishing. Modern buildings are rising to house the influx of gas workers. New taxes from the gas plant are helping finance a cultural center.
Statoil hopes to double its capacity on Melkoya by 2015. That will require finding new gas fields in the Barents Sea.
Hans M. Gjennestad, strategy manager at Statoil for the Barents region, said, “We believe this resource potential may contribute significantly to the long-term security of supplies of Europe and the United States.”
Sure, but we are not all cut from the same mold. Not all who post on iHub are flippers.
But regardless of how many visionaries are resident here, you are correct there are well-informed buyers motoring this wave of accumulation. It is very impressive, especially with increased dollar volume.
Accumulation can come in additional waves at rising price levels. That is the beauty of catching the wave early because even bigger waves can come in behind you to create a very long ride.
There are so many triggers once a stock rises above a dollar and is on the run with fundamentals to back it.
As discussed in an earlier post of mine, some forms of "institutional" buying is not funds, but networked brokerages buying for their clients once a stock hits either the right price or market cap. They can't buy before those marks are broken.
These are some price trigger benchmarks to look for:
$1 - No criteria, but it is the first major psychological threshold that signals a stock is not necessarily an ordinary penny stock. Look for large accumulation here to find stocks that go parabolic like this one seems to be indicating.
$1 to $3 - This is the last zone of psychological resistance that liberates a stock from penny stock associations and pegs it as a future all-star. This is where you find the hedge funds buying large if the stock is going to be a big winner.
NOTE: Hedge funds buying large above $2 is VERY BULLISH. They can buy large at 0.50 and dump at $2, but if they are still loading on the way to $3, then you are probably looking at a monster run and very probably a big long term winner. If the hedgies are scaling out from 2.50 to $3 then they may have played the stock and muscled it higher. But that usually is only done in 3 months or less, not 1 year as this chart indicates DPDW has been under accumulation stealthily for a very long time.
$3 - AMEX uplist criteria. Some fund charters allow buying to begin here
$4 - NASDAQ uplist criteria. Some fund charters allow buying to begin here
$5 - All funds and brokers can start buying here. The gloves come off. This is road show territory where management make the trip to the Street and line up big additional support for the stock. This either results in additional funding via a raise or it leaves interested parties to buying on the open market. If they participate in a PP they support it as well with heavy open market buys.
$5+ - With uplisting, the possibility of options arises. If so, some go very long on long term calls, then buy the heck out of it on the open market to support their option bet.
Blue skies thereafter.
Correct. I am one such individual. I bought in size with many 10k blocks at 0.76 and then again up to 0.93. I gained first hand empirical evidence of NITE and PERT on the Ask then. They got manhandled by strong hands and are now gunshy. The MMs will try to play any weakness when it comes for sure, but they are mostly handling this with kid gloves as the Ask is often weak and they are reluctant to fill orders if they don't have inventory already. Yes, I agree, just call it smart money. Funds, big hands, big retailers, it is all relatively similar if the behaviorial traits are the same.
Your post highlights another good point. Their ongoing growth as a company is bringing them to the attention of other deep pocketed companies and their wealthy executives. People at Schlumberg and Matrix, for example, have plenty of incentive to load the boats in their personal accounts with DPDW stock.
The more the merrier. Perfect storms are like that.
I'd modify your statement as follows:
There is an unknown percentage of the float remaining in retail shareholder hands, but the majority of those shareholders may be aligning themselves with smart money (either due to prior experience doing so or because they may see the light and are modifying their own investment strategy to see if they can finally ride a big Kahuna to life altering profits).
I still contend we will lose some more retailers soon. Many of them don't have the temperament or stamina to ride stocks beyond a few multiples. Conversely, those who will have the will to ride this to $15+ will probably be those still here after $3.50. Those who leave before the biggest rise will probably be gone by then based on my past experience and observation.
How many of those retailers will leave? I don't know. Let's say 50% of the remaining retailers will be out by the time we achieve our next double from here.
Now how many retailers are in the float. Probably more than some suspect. I hold percentage points of it myself, but I'll not discuss share counts. Enough to say there should be some millions of shares held by iHubbers still and some random amount by other retailers not connected to DPDW or Dahlman Rose. This iHub board does matter and it gave some the chance to hold tens if not hundreds of thousands of shares from much earlier at a much lower cost basis.
My strategy is always to buy early, buy large, ignore the white noise and hold. I trade occasionally, but if you want to really make it you do it through buying and holding great picks like these. And it relates to this board and the remaining retailers in the DPDW float because when you have a much lower cost basis you don't freak when the stock goes down 10-20% in a day when you are confident it will regain that and then resume its long term march upwards. You don't fret because you remain very profitable due to your low cost basis. Remember, when you find a true winner, load up.
True Dat CD. Re: Float Tightness see the following:
- One year chart indicating accumulation
- Past one month's ascending volume with INCREASED accumulation
- Evidently limited profit taking by largest shareholders, mostly by smaller position traders
- Buying patterns indicate stepped up Fund buying spree
- Almost guaranteed buying to support recent PP
= EQUALS =
Decrease in Free Trading Shares concurrent with rising Volume
= EQUALS =
Rapid 2 week rotation of free trading shares previously held by traders or profit takers going into even stronger hands
= EQUALS =
No readily available supply of shares to purchase by
Accumulating Funds
Entering or Re-Entering Retailers
Covering Shorts
MMs wanting Inventory or needing to cover Naked Shorts*
*(not conspiracy theory, just a natural outcome of getting caught flat footed when making markets and filling orders without inventory and then stock taking off before you've closed out your account debit by buying back)
Yes, it is a domino effect you want to have in a stock you own. I own a stock with a big fund position bought early below a buck when I accumulated TBLC. They own millions of shares and file Form 4s to show they are adding on the way up which is very bullish. They are exercising their warrants and building their position further as a result which also creates additional cash flow infusions into the company.
A second round of financing just completed on TBLC and that stock is setting up for very big things. Yet another sub-dollar stock that is now over $3 and readying for an AMEX uplist as they fill in the remaining positions on their board. Anyway, funds that support stocks on the way up and keep adding is very bullish.
Few companies have charts like DPDW though. The one year chart on TBLC is splendid and that is a 5-20 bagger going forwards. It has a better OS than DPDW, but it has never undergone the kind of heavy steady accumulation and liquidity like DPDW has. They are both excellent, but DPDW right now is way more explosive, especially with any additional buying support from the Funds out there.
True Dat. Think of it as another form of verification. When someone buys millions in restricted stock you are the beneficiary of their DD. You may not get their DD from them, but it is a key indicator you can often bank on successfully.
About Private Placements ("PP")
Per current discussions re: Ironman PP, here are some things to keep in mind about how PP's work and what to expect from this last one by Ironman Energy.
Basic Facts:
1. Private Placements are pretty much guaranteed to have restrictive legends of one year, 6 months minimum.
2. DPDW will have to register those shares for resale with a filing like an SB2. People see a SB2 and often mistaken it for new dilution. It is not. It actually is registering shares from a prior PP for sale by the buyer, hence resale.
3. If after one year DPDW has not registered those shares for sale Ironman will be free to sell them via a Rule 144 filing.
Basic Assumptions:
1. Ironman was either buying up to the PP or had only recently discovered or decided to own DPDW as it was rising. Either way, they wanted size. Offering to buy them direct was very wise on their part as they could not have accumulated 3M shares at the same cost basis.
2. Ironman may keep buying on the open market. Whether DPDW was only willing to sell X amount to Ironman at 0.96, it is still very, very common that funds will support their own PP purchases by pushing the stock higher on the open market.
This is how floats get dried up. Thus, when you see a fund get PP shares in an interim financing like this you will usually find they are buying more. We will know in the future if they end up with a high enough percentage of the OS to require Form 4 filings. If not, we will not necessarily know how much Ironman owns between 3-7M shares.
3. Company is being strategic in taking in some cash without diluting too much, hence "interim" financing as they are step laddering to bigger things. Share prices climbing are strategically planned whenever possible as long as there is fundamental strength in the news and contract pipeline to support such management expectations. Therefore it is likely correct that:
(a) Company is fairly savvy about the markets in general. These executives do come from other successful public companies after all.
(b) They understand the leverage in building share price to coincide with a chain reaction of timed events laid out in their internal business plan.
(c) Acquisitions will be completed at lesser dilution as share price is higher. Since a deal like Mako can be completed based on something like the preceding 10 day average share price, it is no surprise if it closes later than sooner. It is a win-win for company and shareholders to do so with lower dilution.
(d) Management is share structure conscious. This should bode well for their expansion strategy (see above, i.e. dilution) and because it telegraphs to shareholders and the markets the executives are gunning for their own personal gain via higher share prices via responsible share management while growing the company. This is key for anyone going long.
4. Funds are not necessarily institutional in the classic sense. Ironman or any "fund" does not even have to manage other peoples' money to be called a fund. It could be one man's money investing via a fund structure. Nevertheless, this or any other fund of any stripe represents smart money of sorts. Again, PPs by funds are often augmented by open market share buying to support their investment in the restricted stock.
5. Funds buy hundreds of thousands and millions of shares. They have different styles of buying and selling just as we all do. What you are seeing recently is aggression that shows the confidence of due diligence compounded by additional confidence in the preceding chart support of the last year.
6. Any fund can flip out for $1-3 gain after they load up and drive it higher as the float tightens, shorts cover and MMs get out of the way. But if they do a PP, they usually keep buying to support their own investment. Though they may flip trading shares until their long position matures and has long term cap gains, generally speaking you can assume a PP participant like Ironman was a bullish indicator and therefore we have plenty of support for the stock many multiples above their PP cost basis.
$1M dollar volume is possible today. The continued interest in buying on the Ask is impressive. Somebody is buying hundreds of thousands of shares and filing them away.
Intra-day swings are inevitable. And some will try to leverage their IRA trading accounts and grow their share count by flipping out and back in.
What is interesting now is the anticipation for news will build. Remember the Schlumberger PR sent DPDW up 30 cents in 5 minutes. This is turning into a positioning game for the next move.
Buyers on the Ask mean business. This is getting serious.
I am of the additional opinion some of them shorted during the first move over a buck and wanted cover in the 80s, but have instead been covering at a loss since then. The way they recover that loss is by supporting the uptrend and making money trading the stock as it goes higher. MMs get caught flat footed and lose sometimes, but they make it back in the other direction.
In response, I agree with your basic premise and add that some of the power of the recent move included short covering. But now that is done, the float has become tighter at higher prices and the MMs are not going to underestimate this stock so easily again. Therefore, the Ask resistance will often be weaker and the MMs will step off the Ask with less pressure now due to their prior experience.