All investors in DEG have different objectives and I am repeating the age commentary that this is what makes a market with price fluctuations. We are still in the dark on the reason/s why such big volume went through the open triggered by the OTC selling in US (I presume). Logically, if I were a big holder seeking exit, I would not want to create a panic rush by dumping and the 'drip feeding' has also been commented since the dawn of trading.
A big dump suggest usually these potential thing:
1. An informed seller based on information not usually available to the market taking early advantage. The 'speeding ticket' has now confirmed without a doubt management is not delaying any market sensitive information. Taking it more broadly as a speculated hypothesis, if I assume that the next big event being the MRE is in the modelling stage even if exploratory, could it be some type of leakage however infant in the modelling be the cause of prudency among those sellers? I am not accusing anyone, just exploring all the speculative reasons.
2. Big holders leveraged to the financial markets needing quick liquidity to plug a massive hole in exposure that are illiquid. I will rule out Bitcoin because it is a highly liquid asset class. Maybe some type of property or mortgage back security etc.
3. Deliberate thrashing of the chart technical to cause a panic among technical traders after all the valuation is one of the leaders in the sector but I am not so sure on this. However, if one is looking to hedge their massive positions directly, locking in the gain by shorting literally the same exposure in $ terms could be another logical conditions for a ST bearish outlook.
4. Being the leader in the pack, a pairs trader could short DEG and perhaps long a peer dog to profit from the potential valuation gap contracting, a formidable market neutral strategy, something I had investigated in the past and like all strategies, looks easier than in practise.
There maybe other reasons but I can't think of anyone others that makes the list from a rational perspective and I am just exploring the uncertainty and hoping others can offer more to the discussion.
I pulled out a few peers from my head to see the volume traded yesterday in relative terms and none sticks out like DEG volume so this isn't a random event. Hence I gave it some thought yesterday as it happened before deciding that I was not informed as to why it just got dumped to buy more yet.
Fortune favors the brave.
DEG Price at posting:
$1.31 Sentiment: None Disclosure: Held
(20min delay)