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Wednesday, September 28, 2011 10:05:11 PM
Case of the Incredible Shrinking Volume.
Not sure how many reorgs you have invested in previously, but low volume post-Chapter 11 is not that unusual. I have been in dozens of deals.
Here is a chart of FMNTQ/SGGH (effective date was 6/11/10):
112.6 million shares outstanding
Why does volume seem to dry up? The shareholder population changes dramatically over time. Long-term investors who believe in the story eventually take over. If disappointed, they slowly sell shares.
In the MMPI, the float has also decreased dramatically.
Not sure how many reorgs you have invested in previously, but low volume post-Chapter 11 is not that unusual. I have been in dozens of deals.
Here is a chart of FMNTQ/SGGH (effective date was 6/11/10):
112.6 million shares outstanding
Why does volume seem to dry up? The shareholder population changes dramatically over time. Long-term investors who believe in the story eventually take over. If disappointed, they slowly sell shares.
In the MMPI, the float has also decreased dramatically.
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