Amarin Corp Plc (AMRN)

[yellow_bluff]

I think the last trade before the deal was announced was $6.17 (shares of AMRN were just starting to get some momentum as whomever wanted to sell in Q2 punted and selling abated as July began). As this was a bought deal (the bankers actually take ownership of the stock, instead of placing shares based on a book of orders), the bankers were not going to buy shares from the company at last trade, so they priced the deal in the hole conservatively at $5.60 per share.

I dont believe that risk management at either Citi or Jefferies would have allowed this deal to happen unless it was indeed priced pretty deep in the hole (~9.2% net of fees). Whether or not they were privy to anything material which gave them extra comfort on holding shares, who knows.

I would imagine though, they dont want to hold this stock for that long. They probably were able to re-sell some of this stock above $5.60 and net a profit. Selling pressure here could be from them, or from the big volume that occurred post the deal, or from others who are sick of the downward trajectory.

Unfortunately, feels like we need one more puke to get to the dry heave, unless of course the company feeds investors some medicine to help reduce the need to vomit. Just still a lot of stock out there without a good home.