I happened to look at NEWT's SEC filings. This may be old news at this time, but I don't see it on Yahoo.
On January 15, NEWT filed a preliminary proxy with the SEC to call a special meeting of shareholders for the following purposes: 1. Become a Business Development Company, with all the tax consequences of that. 2. Do a reverse stock split between 1 for 4 shares to 1 for 6 shares. 3. Allow the company, after it becomes a BDC, to issue stock at prices that can be less than book value. 4. A few other things, like changing the state of incorporation, enacting a new stock plan for employees and so forth.
I don't know enough about NEWT to know why the BDC status is attractive. There are tax benefits, but I don't know if NEWT is paying taxes currently. I really don't know anything about the company yet.
But reverse stock splits and the ability to issue shares at less than book make me wonder why anyone would buy the shares in advance of the deal. Reverse stock splits usually tank a company's share price post-split, and why would anyone buy shares at more than book value today, when the company is basically telling you that it might trade below book in the future?
The reverse stock split (at one to four) would push the stock price to $10 and a lot of institutional investors have covenants that do not allow them to buy shares under $5. These institutions buy tens of thousands or more shares at one time.
To date company has shown shown consistent, if not earth-shattering, growth over the past several years without any bad surprises. This coupled with recent director buys in the $2.60 - $3 range (and the absence of sells by directors or CEO) may be part of the explanation.