A warrant technique called cash extraction is a strategy that allows investors to borrow stocks and then sell them - called selling short - and invest the proceeds of the sale in essentially risk-free instruments, such as Treasury bills.
The short sale would result in a gain if the stock price fell because the borrowed shares could be repurchased for less than they were sold; but a rise in the stock would force the short-seller to repurchase the equities at a higher price, leading to a loss. In the cash-extraction strategy, however, the short sale is matched by the purchase of warrants, exercisable into shares that would cover the short position.
Sage, as you stated before, Prospect was probably thrilled at the profit made from the DPDW loan payoff and with nothing to lose played the field especially on the 1 day of the 3rd QTR.
My only concern was that the 500K trade occured on the low(.65) of the day with the 2.1M trade near the low (.70) and the stock was ticked back up on lower trades 10K - 20k.
The stock went up, not down further after the trades, leading me to think that this was a prearranged share transfer of sorts.
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