RBxIMONormal business practice for a small biotech - cr after cr...

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Merchant2000

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29/04/20

14:02

Post #: 44325719
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Originally posted by RBx: ↑

On 2 March, someone borrowed 691,661 KZA shares. The stock closed at 58 cents that day.

On 6 March, a single trade of 500,000 KZA took place at 64 cents. At that point the stock started to plummet, reaching 40 cents on 1 April. The CR was announced on 8 April.

Hypothetically, let’s assume that someone thought a CR was imminent, decided to capitalise on the well-known fact that it would be offered at a discount to the VWAP, borrowed nearly 700,000 shares and sold them shortly thereafter. If the SP rose, that person would have been able to cover the short for a small loss at most, but if the SP tanked then a handsome profit would eventuate.

I estimate that this short will earn the instigator about $150,000 but cost the company dearly.

It is quite possible that KZA intended to raise funds at a price higher than 40 cents, but by the time everything was in place the horse had bolted.

Minnows like KZA and NOX are vulnerable to share price manipulation when a CR is clearly needed. Just because the KZA CR is at 40 cents does not mean that James Garner is incompetent.

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RBx

IMO

Normal business practice for a small biotech - cr after cr after cr to pursue dreams

Like you said blaming CEO is just another excuse on top of the million we have all heard since 2016

KZA Price at posting: 40.0¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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RBxIMONormal business practice for a small biotech - cr after cr...

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