Echo Therapeutics Inc fka ECTE

[seeker_of_value]

The downdraft happene becaused apparently some people knew what the new offering price would be, or it is also possible that they wanted to short the stock so that the offering price will be low. The idea of shorting was that they could short at a higher price and then buy the stock back at the offering to cover their short position.

Now everybody knows the new offering price is and we are already at the offering price, so it makes no sense to sell the stock below the offering price. Essentially a bottom has already formed. I think the selling must have happened with a lot of stock being sold short. Now those shorts have two options - buy the stock back at the offering and close out their short position using the freshly bought stock. However, if the shorts are unable to participate in the offering, then they would have to buy the stock in the open market soon.

Another factor to consider is that the company has a very valuable technology platform whose value is much higher than the current valuation (including the new 4 M shares) of 28 million dollars. So I will also expect fundamental investors to step in once the offering date is past.

Seeker