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Insmed Incorporated Message Board

  • insmhistorian insmhistorian Jul 17, 2013 5:59 PM Flag

    Question about offering and share price

    I thought I would start a new thread so I can maybe understand this better.

    The offering price of the new shares is $10.40.....but yet we sit at a market price of $11.78 Logic would dictate (at least in my crazy world) that today's close would have been closer to $10.40

    So, are those 6 million shares NOT available to the market but just to the funds? What is propping up the share it the shorts covering?


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    • Remember, they just made a major investor conference presentation and likely another 10-12 meetings on Wall Street just a little while ago. They clearly drummed up demand and sweetened the buy through this ploy. The funds now get a firm price with no wild swings due to buying pressure. Existing funds may have shorted on their buying and were also allowed to cover at a set price without driving the price up. This was the trade off for clearing out institutional shorts and more fund buy ins. It appears it worked.

      Sentiment: Buy

    • Historian - the offering price was $9.776.

      $10.40 is the price the Company guided retail investors would have to pay if they contacted any of the three underwriters to buy shares the Company sold in the offer.

      I would imagine that any retail investor considering buying shares would have bought them shortly after the Phase III results were released - and that the $10.40 is basically a deceit on the part of the Company and the underwriters to deflect attention from the price at which the Company sold the shares.

      It seems a safe assumption that the institutional buyers who doubtless pre-ordered the shares will not be paying $10.40.

12.75+0.42(+3.41%)Feb 9 4:00 PMEST