turmoil is caused by the management
By chillinginbarbados . Sep 27, 2012 10:57 AM . Permalink
when I said the financing deal in Aug was one of the worst, it wasn't just that we long term holders were getting a 30% haircut no matter what. It was also because of this type of stock trading that will keep EXEL a bad name to trade at least for the short term. If you were financing the offering you would participate in both the common share buying and the convertible at 5.5. Since the stock was a 4.25 you would short the share at anything above 4.25-to 5.5 and make money to pay for the convertible part of the deal. When EXEL hit 5.5, a predictable massive shorting began. When it hits near 4.25, buying will start again. This cycle will go on until the financiers will make money to pay for the financing. In the meantime retail investors will be burned and won't touch the stock for a while. On the sideline is the other shortshort action that will prey on the weak demand and the possibility of another shoe dropping, bad news, stupid management etc. Don't know how long it will take financiers to make money to pay for the financing but this yoyo won't go away until the stock will well above 5.5 with some real news. When you trade or invest in comp like EXEL that is in the pockets of GS and the ilks expect to be shafted.