i was wondering who would know if this secondary offering on cmed will help or hurt the price of this stock. i am not sure the benefits of offering this secondary and why Jim Cramer said to be careful, only to buy the secondary. i didnt know what he meant by that. i would appreciate an honest opinion. thanks
The only silver lining for the Secondary is that the float is increased a lot, so that MMs/hedge funds cannot manipulate the stock price as much as they did before.
More shares available on the market, so if there are more buyers, then it will help the stock price, but if there is NO buyers, then secondary will HARM the stock price. In any case, CMED stock price will be less volatile than before.
Buying secondary was easy money because it was below price of stock currently. Since it goes to the rich client's and represents 30% of float there is major money to be made. It was an easy gain for these people because others will bid the price up even higher like broker firms. Some stocks like this is a way to manipulate the market. Get people to buy higher push the stock up so the rich can make a fast buck. You have to think about the fundamentals of the company and if it has long term prospects. Secondaries are usually good and not used to rip people off.
90 Day rule is important. Not sure if these new holders really have to wait 90 days. It seems by the SEC release they don't. This means they could go ahead and sell their stock for profit. They can push it up for big $$$ or sell for quick profits. Next week will be important.
When investing you should think long term about company growth "First" etc... And leave the manipulating to the rich.
Jim Cramer says to buy this stock which came down so much only because of the secondary offering even though we should be careful. He also claimed: "When they are giving you that free money, you gotta take it."
To view the details abouth what he said on TV, please read the following articles: