SCKT..bbotcs..why selling pressure may slow/price increase:
As you know, there has been a lot of pressure on the stock in the low $2 range pushing it back down every time it moves past it (for quite awhile now actually). Here may be why:
From original prospectus of debt conversion last fall: "Under the terms of the Note and the Warrants, a Holder may not convert the Note or exercise the Warrants to the extent (but only to the extent) such holder or any of its affiliates would beneficially own more than 4.99% of our Common Stock"
i.e. our debt convertor, Hudson Bay, can't own more than 5% of the outstanding stock without permission from the company (it's why the 13-d I've been wondering about hasn't been filed recently). That means of the 666,000 shares Hudson Bay has converted (200K earlier this spring/summer, 466K from August 6th on when the company forced the conversion), Hudson Bay has been forced to stay below 250K shares total (assuming 5% of 5M shares outstanding). As such, they've had to sell continuously to reduce their share count before converting more, especially in the last month plus.
For a micro-cap, that's a lot of selling pressure. I've been wondering why anyone would sell (after years of waiting) when things only finally started getting potentially good for SCKT.
Who knows if they will sell down to 0 shares or stop at 250K shares (we can't know) but it does give us an explanation of price lately.
Let's put it this way.....there have been bids above $2 for the last 3 days that a seller hasn't sold into. That's the first time in weeks. Perhaps the selling pressure of Husdson Bay is over??? Interesting if nothing else.
