The reason for the sell off could be a looming secondary to pay for the recent additions. Rather than holders selling it was probably shorts in the know making the easiest money on the street. A risk free trade if you know the placement price. Tell me this mkt is not rigged!
Looks like my call was wrong - sorry to anyone that was mislead. It now just looks like profit taking before the spin off and perhaps some nervousness/unwillingness about the change of share structure. Still long myself and added on the dip, but sadly not at the bottom. With the increased distribution to be announced soon i hope and the tasty yield, this one was always a keeper anyway.
There is not going to be a secondary in this stock. It is going to split into two companies in a couple of weeks. They can't do any secondaries until after the split. It is also untrue that the stock is being shorted. The total short position in this stock is rediculously small. It is just volitile, thats all. Volitile up and volitile down. What you are seeing is the result of stop losses being triggered and people taking profits.
Stop worrying. Look at charts of past performance. This happens occasionally and then the selling ends. Fundamentally the company is unchanged and the prospects are great. It will hit new highs in weeks not months. No stock goes straight up forever.
Newcastle Investment (NCT) trades about flat with yesterday's close despite going ex-dividend today ($0.22). The stock shed more than 7% over the last 2 sessions, maybe hit by the post-earnings dive in somewhat-related Walter Investment, and maybe on chatter about another secondary offering in the works. CSFB is defending today, upping its price target to $12.50.
A risk free trade ???, I seriously doubt it. Not sure what u mean by placement price. The IPO price is common knowledge. If one examines recent spinoffs, the price out of the starting gate gyrates all over the place, Some go up, others go down, no predictiing what it'll do short term.
How much more free can it get? The stock is at 11.60 - you get wind of the secondary placement price which is 10.50. You short at 11.60 and all the way down to 10.50. The announcement comes that there is a big secondary at 10.50 which you already knew. You cover into the placement or quite possibly below. If that is not free money i don't know what is.
Not that I know, but I saw a similar downwash on SLCA last month....I think it was just a stripping of stop loss orders....the stock had a similar run up in price...maybe they just look for such conditions of people wanting to protect profits with stop loss prices.
But who knows, except in hindsight.