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The only nice thing about that is now we know where all the shares came from, and that at least that convertible noteholder has been paid off. Those old note conditions were set horribly, but the more they fulfill, the less debt the company has on its 10q. It makes the balance sheet look a little better, but hurts shareholder in the interim, until the company shows sign of generating significant revenues.
Exactly. The only problem with issuance and resale is if the "accredited investors" are actually privy to information on the company that is not available publically. If this were the case, then it would be illegal for them to sell shares into the market until all information regarding the company's business is publicized to the extent of the knowledge they know of. Otherwise, they can just burn it out. At least we know where that dilution was coming from now.
So many diluting MM's on the bid makes me think they oversold their positions. I think a rally might be in order, but the 20% flippers will be coming out of the woodwork for it, too. News may be necessary to push this past .0015 again.
Just wait on that next news flash, sir, and notes to be finished long enough to allow the stock to breathe. It can run 5 times from here easily. 10 times would be a stretch, unless they produced fins to support the market cap.
That typically happens when the larger clearing houses don't hold onto that many shares of otc stock. NITE especially. ETRD is known for being a good platform for pennies, so they would be more likely to hold more and short less. If NITE doesn't have anything, then they usually pass to CDEL, and instead of turning the order down they will naked short no matter what. It's the game of a market maker - just can't say no, so they aren't the uncool kids in school. Haha.
Those are mainly retail trading reps. I actually would bet more on that being retail flippers, traders, or investors loading. There is lots of anticipation for this week, and also the percentage gains from fast flips have been rather consistent. That is also why we have such large share amounts on the ask stacking from the same MM's - some people just set it and forget it.
I wouldn't say it is all MM's brother. Have you read the last 10q? I did before jumping in, but the numbers for the wagering should be high enough that they should be earning enough to at least pay portions of conversion notes. However, it seems they aren't. They have been awash in convertibles for some time now. I also anticipated that the amount of volume already pushed through the stock would have been high enough for the notes to have been honored fully. Their conversion factors being as horrendous as they are, though, it appears that they may not have been. When the CD holders get a rate at 50% of the period's averaging, then they can burn off all they want down to at least 10% above that and be happy. It still earns them money. There isn't a whole lot of naked shorting occurring anymore here. Nothing left to cover, almost guaranteed. So this is the company and the management's own fault. The BKMM, BMAK, and VFIN appearances have been both dilution and utilization of offshore platforms. It hasn't been pretty, but I am hoping those numbers of the virtual horse racing and online casinos show up well in their 10q. That is the main reason I am here still. The prior management team, without the new addition has not made very sound decisions or deals. They should have their 10q out by the 15th, to maintain their Pink Current status, though. I also am wondering if they made another deal for additions to the gaming portfolio, or if they will be releasing notifications of complete payoffs of multiple notes, that I expect after such large amounts of volume. Don't put it all on MM trading practice though. It isn't always them - especially in this case.
Would you mind sharing? I haven't received word back yet from the TA.
Very nice! Congrats man. Sometimes that's the only way to do it. 65% is a great gain for one week.
It could be MM collaboration to drive the price down to cover losses from naked short positions last week, if it is a mainly MM driven wash. Otherwise the note holders may be trying to tank the price for averaging of prices over the 7 day period, for future conversion. Both of those scenarios could be in anticipation of a run, to load for more shares. It also just could be direct company dilution, which shouldn't be necessary if the gaming volume and revenues are doing well. Many possibilities here, so I just requested an updated S/S. All MM's listed are in fact usual handlers of this security, though. It is an odd run down, though, but retail isn't helping with the ask stacking. Now it is simply just waiting on further information.
Okay, so there was roughly 400 million naked short sales above this price last week. Now we see all the usual shorting MM's on the bid this week. There is a chance some of this is intentional washout attempts to cover losses. Also need to crosscheck to see which of these MM's usually handle ELRA's securities, to see if some of these are MM's that had orders just passed off to them for fills and are now trying to recover their naked short positions.
I read the part about the company taking "appropriate measures to restrict the transfer of securities", but no specifics on the actual restrictions applied. There still could be something that the company missed or failed to appropriately restrict. The noteholders were also allowed to transfer their securities to other parties, and that may be the transfer restrictions being spoken of, whereas they might still be able to sell the shares and just not transfer the securities to non accredited investors.
Wow. Looks like a washout occurred this morning. Now VFIN is loaded up? BMAK, BKMM, and VFIN taking turns here on sales? I suppose those "accredited investors" that were going to "keep shares for investment and not resale" sold some shares. My bet is they are wanting a higher conversion rate for the rest of their notes before the next news cycle, and subsequent run. Unless the company is diluting itself. Anybody have an updated S/S. I noticed not much in the way of naked shorting, either. So that isn't the reason for a drop here. Didn't expect the break back to .0012, though. Interesting...
Finally hit the .0015 support. Should bounce back up a bit from here. I would estimate .0019 close for the day, and another 15% uptick tomorrow morning. Afternoon may be interesting tomorrow with Friday's usual trading pattern, offset by the momentum. Most likely a flat close, but nice Monday.
Exactly. Typically, that is called libel. Lol.
Interest rates have to come up, at this point. We are starting to see that inflationary trap set up, along with the major issues with agricultural resource pricing due to the droughts and problems in base level crop productions over the past few years. Good things- higher organic US oil production and lowest levels of unemployment in years. With higher interest rates, maybe companies will stop holding onto so much cash and investing back in their own businesses instead of playing the stock market with everybody else. None of this effects ELRA, but I like to stay in touch with big picture economics as well. I actually am not sure we will see more decline tomorrow anymore, with how the trading has been cycling this week. Actually might end up seeing a 15% rise again, and pending news and the 10q, more positive action next week.
That is definitely understandable. Lol. There are always plenty of those, though, everywhere. Ihub fosters this action, though, simply by their allowance of blatantly false information to be posted about any company and its officers, because they maintain that BS disclosure "all posts are opinions".
I see the point of being straightforward, though, as well. That way he keeps from being named as a deceptive trader, and as you said, it doesn't usually make a whole lot of difference in price action, typically. The oddities aren't only in the otc recently, though. Lots of odd market movements across the board recently. It has been a strange quarter for all investors / traders. A great deal of hesitancy in the higher markets sometimes pushes traders down to the otc for the fast turns, though, which results in even more volatility here. Everybody seems weary of the inevitable market correction from the extended higher market climb these past 5 years.
Even at 10% wagering the equivalent of $1 for a lotto play per month, that would equate to $140 MM in wagering. The online source domain makes it easily accessible, as well. As for bid sitters - this used to frustrate me at times, but after watching lots of situations in which the ask was torn into quickly without bid support, and a subsequent sell down as soon as opportunity presents itself, it is another item that has just become necessary for part of the trading movements. We need bid sitters just as much as people buying off the ask. The balance keeps the volatility lower and allows a more stable climb.
I am very interested in the Lotto addition, actually. Everybody loves a good lottery - just look at how much money is sent to education by the US lottery. We don't nearly have the population the markets they are drawing on do, either.
That one jumps in and out of stocks very quickly. Doesn't even shoot for typical 20% gains. 10-15% is all he tries for, and will trade multiple times, switching between touts and insults. I have seen him jump on and off stocks very quickly repeatedly. (StockW, I am referring to.) Nothing wrong with it, really. Name of the game here is money and the otc is rife with risk, so he plays it safer. Just funny on how bipolar some of his posting becomes.
There isn't a lot of shorting, aside from MM naked sales here. Flippers - yes. Of course, because the name of the game for them is to go for the 20-25% turn only and cash out. It's been stifling movement all week. That 10q would be nice to see. Since we dropped below the 18, it is still quite possible for 15, but I had already anticipated this occurring. The price action and candles told the story all by itself. It should recover next week, most likely. Its not a terrible set, anyhow. The volume of wagering is still incredibly high, and only shows signs of elevation as they expand into the asian markets further. A little more of an idea as to increases in revenue compared to last year's comparable quarter would help tremendously, but I wouldn't worry too much.
BMAK actually has been moving up and down pretty easily, with the flow of trading. It's mostly retail day trading and flips keeping it subdued.
Is that confirmed? Otherwise, I honestly wouldn't be surprised at a light draw once more to .0015 before the next rise. It may need to play out through Friday, since there are going to be plenty of flippers playing at a 20% spread, and unloading before the weekend (especially with the slow down on volume). I would have thought a PR would be more likely next week. Either way, lots and lots of room to run from here.
I definitely agree. That's why I am here! It looks ready for the next run very soon, actually. Sales have dropped, with the usual light stall until 1230, then another round of buying expected. With the thin ask levels (as long as nobody sets 5 MM share blocks up), I think the afternoon has a good chance for .0024-.0026. The day trading may keep it a little subdued, but all in all, a decent position for movement.
I wouldn't worry too much about BMAK here, btw. It looks like it doesn't take much to move him up. He is just hanging out on the ask as it rises.
Couldn't resist a nice rebound after seeing the gaming volume from October. East Asia has a huge gambling market, and they are setting up well. Still waiting on the other one, as well. That may take a couple months yet. Love their product, though. This one looks like a much higher ROI, though.
Personally, I am not sure why they would be asking for share issuance, if not for resale. At least a partial resale to lock in more shares issuable for conversion is plausible. Seems a little odd to be requesting that volume of shares if they wanted to show a solid investment in the company.
Definitely a lot at .0017 and .0016. The bid may just be moved a tick lower and concealed because a market maker has a smaller order at a higher price, as well.
There was the issuance of approx 350 million shares per the 8k on 30 oct. Some of this is probably just the cycling of remaining shares held by noteholders. Volume has also slowed significantly, so next round of buying pressure could push it right back up easily with the ask thinning out. Interesting chart set, without a whole lot of MM short sale utilization. Might just need another day of consolidation before recovery back to at least .0026. I wouldn't assume .01 any time soon, with the inflated levels of the float. Their revenues have to increase exponentially to support a stable run to sustain a level like that.
Very good to read an interview with a company officer, and see the perspective and anticipated direction. I haven't been as active in trading lately, as I would like, so posts like this help with updates when I am tied down with other things. Thank you very much for posting, sir.
This is an exceptionally late reply, I apologize. I have been very busy, and really am not worried at all about this stock gaining value in the near future, so I haven't placed as high of a priority on checking in here.
I do agree with the first two statements you had made about terms of share issuance, however that is about where we disagree. Most of which is simply a matter of opinion, but some of it I am curious as to the rationale.
The opinion part - I think that the possibility of your option number 2 happening in the near future may be higher than you think. It also depends on your consideration as to what "near future" means. I am considering "near future" to be within the next 3-6 months. Since this company is an "emerging market" company, not just R&D, I think the possibility of rapid growth occurring quickly is significant - given the product design and intention. I would also take into consideration the number of countries they are currently marketable in, the approval for government reimbursement in some countries for disposable strips used, and the fact that there has been no return of product under warranty rights, to date. Revenue recognition will occur according to payment due dates and agreements, if they are already selling the products.
If the company were to participate in future financing agreements by sale of common stock equivalents, it is required that David Edery is able to participate in financing agreements, as well; to ensure his maintained level of "fully diluted percentage interest" in the company. So they would have to maintain a balance of unissued shares for this purpose, if the stock is used in any further financing agreement. This is stated in the new filing, as well, in more than one place.
So they don't have full access to the 45 MM shares, outright, for generalized dilution.
I do apologize for the confusion, as I had been replying in the context of share availability of the company to dilute. Not simply share price of open market transactions. I also want to add a thank you for the civil tone change in open forum, by the way.
If I had meant that the stock was subject to price based anti-dilution effects, then I would have stated simply as the price drops of the stock the more share entitlement the investors would be entitled to (which would make this company a definite pass for investing purposes - like you said toxic/bottomless financing). I have consistently been saying only if the company chooses to significantly dilute further the preferred Holders would be entitled to further shares, and the company would be required to maintain more shares for Preferred conversion. This, would then effect the price adjustment. As you said - retail investors should take comfort in the fact that this means the preferred holders have nothing to gain from significant drops in price without company driven dilution. This keeps both the company, and preferred shareholders from having significant reasoning in wanting to see the price drop, while placing controls on how much the company is able to dilute without increasing the A/S by public registration. If the company were to attempt significant offerings, or issuance, this would require an increased reserve of shares to maintain the preferred shareholders' interest. While it is always possible the company may just raise the A/S, it would still require a registration statement and public notification, as well. So the company still does not have full access to issuance of 45 MM shares, without at least maintaining half of it for reservation of preferred shareholders' protection of interest, considering the proportion of value to the Holders that would represent.
Why don't you provide the information that the price is fixed? I don't have the time at the moment to go through it to find the specific quotations. I will tend to it in the morning, though. I think it may be under the mechanics of conversion where it states the amount of shares will be factored accordingly to stated value of preferred shares ($100 per), and then the price of common stock at the time, followed by an example of the filing to be completed at time of such conversion. If you don't find it, I will pull the quotes out of it in the morning. Otherwise, have a good night.
Not a problem. It is not only a bet, but a contractual obligation stipulated in the agreement. I read the filing when it first came up, but I read through so many filings and have so many other projects I work on, some of the details slip my mind. I am glad it helped, though. I am very interested in the directions DRIO is going over the coming months. It should be very interesting - particularly if the FDA approval is forthcoming, as well as the possibility of penetration into Latin American markets with Edery's connections.
Thank you for the compliments. I apologize for any confusion for others on the board. I just posted another response that may help, but I am not sure if I put it simply enough for everyone to understand. I don't always think of some lack of understanding for business sense and financial terms that some traders have. I apologize for this, but if anybody has any other questions I can try and break it down a bit simpler (not directed towards you Smilin_B). It may take some time between some responses, as I do many other things, but I will try and get back to anybody as quickly as I can. Good luck folks, and I hope others see the value in DRIO that actually is there!
Okay, my mistake on the new investors' rights to sell into the market securities immediately per section 4.1 (e) of the 8k:
(e) Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will not sell, transfer, assign, hypothecate or otherwise dispose of any Securities or any direct or indirect interest therein for a period of sixty (60) days following the Closing Date.
The company itself is also restricted to maintain enough shares for issuance to satisfy the amount of common stock that would be issued for conversion, that is subject to change dependent upon the common stock value, furthermore based upon the stated value of the preferred share price of $100 per share. The warrants for common stock that may be issued are subject to the R/S terms, but are also subject to recent closing prices of the share value. This also means that the more dilution they participate in, to the detriment of the share price would result in the necessity for them to maintain the shares necessary, at a minimum, for compensation of preferred stock conversion of their original investment. So no matter the math we attempt now, it can change within the next day, or week. So to avoid the impact on PPS that would effect the company to maintain a higher amount of shares available, the company is limited in their capability to dilute, as to maintain a high enough unissued share availability to satisfy these terms of the agreement. The company is also restricted from further private placement share issuance without approvals of Dr. Edery, and appointed board members, or risk further need to increase A/S issuance to maintain the preferred share control Dr. Edery and aggregate investors have purchased. So the company may have some share availability for issuance, but not without maintaining the proper amount to compensate investors until 2018. So this, in itself, limits their availability of shares to sell into the open market. It is a variable price rate, not only fixed to the amount of shares currently held. So go ahead and crunch the numbers every day, if you would like, but the restrictions are still in place to avoid such ostentatious dilution actions. If the company were to commit such action, then we would get proper notification of new registration of securities for an increase to A/S. The preferred share allowance for new investors is not necessarily a "moot point" either, considering the possibility of higher investor purchase that would require even more shares to be retained by the company for the case of any further conversion requirement. Also, if any investors were to liquidate shares, it would also entitle the other parties involved the same conversion price calculated for the purpose of conversion and sales. This, too, restricts the company from being foolish enough to dilute common shares into the open market that may risk further loss of value to investors, that they would be forced to compensate. Also, the fact that Edery maintains 3 members on the board (unless he sells below 25% control) assists in protecting his investment in management and fund raising decisions. Either way, if they decide to dilute and force an increase in S/S, then we will be notified of this occurrence by filings. There is always the possibility, but the controls in place decrease the probability of such actions.
I apologize for the delayed response. I had some other business to tend to this morning.
The warrants issued for preferred share stock conversion are only necessitated to be 50% of the value of the conversion value. The agreement states the company must maintain availability of shares up to the full conversion of preferred stock share value (per the terms of the agreement). So you should double the amount of warrants issued/exercisable, and immediately take those out of the equation. Then add in the rights of the financiers to purchase up to an additional $1.8 MM above the amount initially invested, for a total of $6 MM, and the further necessity for the company to maintain adequate common stock holdings to fulfill this agreement, and you leave very few shares for the company to dilute. I am too tired to do all the math for you, right now, but you can read through the initial announcement of sale (stating conversion rate to 55 MM shares at the lowest), and the filing's terms to find all the information you need. The company cannot dilute 45 MM shares into the open market without serious detriment to the value of the share price, or risk having to increase A/S to a level necessary to protect initial investor value. The terms of the agreement also state that the company cannot make offerings of common stock or preferred stock furthermore, without also accommodating allowances for initial investors the same price offerings or share value issued. This restricts the ability of the company to dilute openly into the market without approval and proper procedure/filings to protect the initial investment made by the new investors (and also would notify common shareholders of any dilution by the company). Again, the only people allowed to currently exercise warrants and offer shares into the open market would be the financiers, but that would still necessitate the proper filings to notify the public of their actions. The 8k has the full terms of the agreement, and even includes the initial PR of new investment amounts and requirements. Please read all the way through, as boring as it may be.
Keep in mind this is only a few days following the R/S, in which the float has been significantly reduced. The company cannot dilute of their own accord without an increase to A/S. The only possible dilution would come from new investors that put in $4.2 MM, collectively, and would have to be announced in the form of a filing of conversion of preferred shares (we should hear if that is the case by end of the week). This is also a time in which a stock is an easy target for low volume manipulation, dependent upon securities available for short selling between brokerage platforms/companies, and the levels of buying pressure. Short term losses in this specific situation does not always equate to long term total loss, either. If you just want to day trade, then yes, you may want to believe in the idea you are attempting to "drill this lesson" in your mind. The main lesson I would definitely take is to never depend on message boards for accurate depiction of stock value. That should be determined based on your own DD, and understanding of the company's direction, plans, and filings. I don't think there is quite the need for panic yet, though, considering the low volume being traded still. If you want to participate in mid to long term trading, then focus on the fundamentals of the company in regard of future prospects, and using technical tools to time entry and exits for the various reasons of - increasing share amount holdings on drops, protecting profits made, or short term flips for retaining value of initial security purchases. DRIO's S/S hasn't been completely destroyed or changed for purposes of dilution like some claim. Read the full 8k detailing the terms of the recent investment agreement to gain a full scope of possibility of company intentions/direction. Good luck, sir, but try checking the emotion of two days of decline, and focus on the actuality of company practice.