EXCELLENT explanation of what is happening regarding the share price action. Found on yahoo board posted by Brian.
Brian
7 hours ago
If you REALLY WANT TO KNOW what's going on with NVCN, please read. Warrant holders are getting RICH. Here's how...
First, warrant holders knew back in November that when the A, B, C, D, E, and F warrants were issued by NVCN that this would cause dilution. So they shorted the living sh t out of this stock. Why? For two reasons:
1) To make money. And boy did they make a ton of money shorting NVCN.
2) And this is the biggest reason, the LOWER THE STOCK GOES, the more shares they would get. Simply put, the warrant holders WANT THE STOCK to go as low as possible. And with about 1.22B shares now outstanding, they succeeded big time.
Let me explain further...
Many of the warrants were issued with an "Alternate Net Number" provision attached. Most of you probably have no clue what that means. So let me confuse you some more. The "Alternate Net Number" is equal to the product of (i) the quotient obtained by dividing (x) the total number of Series F Warrant Shares with respect to which the Series F Warrant is being exercised and (y) the maximum number of Series F Warrant Shares initially issuable upon a cash exercise of the Series F Warrant on the date of issuance and (ii) the quotient obtained by dividing (A) the difference obtained by subtracting (x) the the LOWEST daily volume weighted average price during the ten trading days period ending on and including such exercise date (the "Market Price") from (y) the exercise price as of the subscription date by (B) 85% of the Market Price.
In layman terms, they take the 10 day average price, and then get shares 85% below that. So if the 10 day average price is say 5 cents, they get their shares at $.0425. That's a heck of a deal. This is why shares continue to hit the market even at these prices. But here's the other part of the equation. The LOWER the stock prices goes, the AMOUNT of shares they get EXPLODES and increases significantly. This is why they have also been short the stock since November! But know this, the warrant holders will cover. You can only make 100%. Most of them are already up 95-98%. Their goal is not to make more money going short. Their goal is to GET AS MANY SHARES AS POSSIBLE. And once they do, this stock will CLIMB BIG TIME and they will then also make huge BANK on the long side.
Brian
7 hours agoReplied to a reaction
$NVCN conversation
@jim That's it. Most warrants have been exercised, with probably 4-5 million left, but because the stock is at 5 cents, this equates to about another 300 million shares. But considering there was only 104 million shares O/S back in November, and about 1.22 BILLION now, with the CEO projecting around 1.57 Billion once it's over with, yes, dilution is nearing and end and when that happens, the warrant holders will COVER, lock in their 98% gains, and make sh tloads of money on the long side. I've seen it time and time again. That is why I WANT THIS STOCK TO GO DOWN ANOTHER PENNY because if it does, I will throw $500K at it. No joke.
