Then stock soared for about two months before crashing down obviously in anticipation of the November public offering of 4.3 million shares of common plus warrants. I'm curious why the stock rallied after S-3 had been declared effective back then. Folks familiar with the stock please provide details. Thanks.
Management was also a little too slow back then to seize the rally high of close to $3.5 to price the offering. Instead the pricing was at $1.45 per share. One possible reason could be the management was waiting for the stock to go up even further only to find that the rally is not sustained and so they ended up offering at a sub-optimal price. Comments?
The company who does the secondary knows they are getting a piece of the secondary offering and warrants to buy at a specific price so they rally the stock with a small amount of shares to get it going, they sell it short big time and then cover their position with the secondary and/or warrants. Its all poison. About half of the current short position comes from the last secondary that was done. Back then about 2.1MM shares went short prior to the offering. They have warrants to buy the stock at much cheaper prices than what they sold it short for. It is most probable that for any small company like this, there is no real interest for investing in the company, just the ability to take advantage of their situation and make some easy guaranteed profits.
So if you are right we should see a rally before offering again.
Also, after 2009 offering, in about 14 months, SP went from $1.45 to $7.10.
Why? Revenues and fundamentals improved. QUIK's revenues are increasing rapidly now. Guidance for Q3 is $6 mil which they will easily beat. Expect company to break even at end of Q4 beginning of Q1. Need revenue of $9 mil for that.
Improving fundamentals along with Tier 1 customer and World contract will increase revenues to more than $10 mil in Q2 and beyond. It looks like history repeats itself...although this time with Tier 1 in place, World contract (which may turn out to be better than Tier 1) the SP rise may be more spectular than the 2009/2011 period.
Expect some spectacular squeeze sometime in December. It would have happened in August, but offering messed things up temporarily.