Banter and general comments, page-807

There are many factors at play. This is not unique. The market is a reflection of all of us, an insight into collective souls and minds.
Firstly you have a segment that has been undervalued for a few years and beaten up badly. Many holders are despondent and psychologically weakened. Now I have been guilty of all the following traits and actions at times. You learn. Quickly, hopefully.
First cabs off the rank are those that have lost all hope and sell at a loss. They are out no matter what. Fear of total loss clouds your every waking thought.
Then things turn around inevitably. The price of the product starts bottoming. The SP stops falling as well as starts creeping up. Next cab off the rank are those who get out at roughly break even. Thanking their lucky stars that they dodged a bullet.
Prices then continue to rise. Next cabs are those who get out with a seemingly handsome small profit or 1 or 2 bags. Next stage are when things get hot. Great sentiment, prices rising, always a greater fool to sell your shares to for an even higher price and things go parabolic. Greed has kicked in.
It gets to a stage where prices have gotten so high, that buyers are not there anymore. At the same time due to the extreme profits holders are sitting on. Supply increases. Supply>demand. Price starts falling. Fear starts creeping in again and down she goes at a rate of knots as sellers fall over each other trying to get out. Eventually equilibrium is reached again where more buyers than sellers see value and it stabilises. And we start again.

As far as a CR is concerned. Firstly it dilutes the value of the company. If shares are issued in this case for 15% of the float then every share already in existence is worth 15% less. The market cap should be the same. Now on top of this say in CXO's case where there had been a pump just before and the discount offered is higher than normal there is a compounding effect of disgruntled holders and if they are sitting on profits will lock them in putting downward pressure on the SP. It's like you buying a car for $50,000 today and tomorrow the company floods the market with production and your mates are offered it for $40,000. Not only do you feel ripped off but the car is now only worth $40,000. And also everyone knows it and no one will pay more than that, so any remaining cars pre special will be bid down to $40,000 as well. Who would pay more? Instead of the market defining price in its discovery mechanisms. It has been announced. It is now worth $x by the company.
Anyway good luck and sorry for my babbling on this evening. Good night. Vikings is calling.