Alto Ingredients Inc (ALTO)

[Rule_62]

Is it the warrants that are the primary cause? Or is it a combination of the April dilution combined with a continuing negative EPS? The market knows what the potential future dilution is due to unexercised warrants, and can factor that in. What it doesn't know is whether another secondary is right around the corner, and unless they've taken the time to examine PEIX in depth, what it also doesn't know given the past history, is how much of the current turnaround is due to strong management, as opposed to the overall turnaround of the industry. And then of course, there's the uninformed who react only to the media focus on numbers like EPS (and therefore believe the company is in fact, continuing to operate at a loss).

That said, I suspect the institutional investment in the company has increased considerably since the March 31 numbers became available. While dilution has affected that increase in terms of percentage, in terms of absolute numbers (based on the numbers provided on the Nasdaq summary page), institutional investment already increased from 1.520M shares on Dec 31 to 5.387M shares on March 31. Looking at the action we saw due to the Russell rebalance alone, that number has again increased significantly in Q2.