Sorry, I guess I jumped to conclusions and assumed that whoever was buying on margin were institutional investors. Do you have any idea how much of the stock is bought on margin? That would be a key thing to know for understanding the behavior of the PPS.
What bothers me is the run up from $5 to $6.50 in the four days before the announcement of the direct offering on the 21st. Then the PPS collapses back to under $5. In the previous 3 weeks the PPS was about $5, or less. This is just too much of a coincidence. It just looks like blatant manipulation using insider information.