Everybody do some DD this long weekend. Here are some places to start:
From the December S-3 (at the beginning of the document), only 1/3 of the amount of float can be given out in 12 months if the company market cap is below $75 million, which it currently is. So if the float is about 20 million shares as stated in the S-3 then only 6-7 million shares or equivalents could be issued at current level.
The other thing is, the warrants issued in the financing last FALL with the preferred stock can only be exercised after six months time from issue. This is in the October 2012 10-Q (section 5d). This is at least out until the end of March 2013, when the new $2 warrants can be converted.
The Shorts simply scared everyone into selling, so they could cover. Stampede.
You're right, kitty! Good review of the float and warrants.
Today was a coordinated assault by MM's, Shorts and bashers. They scared investors who are uninformed or new to biotechs into selling their shares. Shorts know that they need to cover themselves, so they executed a well-coordinated basher assault to mislead uninformed investors while MM's controlled the flow. Shorts kept buying inexpensive shares and succeeded in suppressing the price. I can only speculate that they will continue the assault next week as they probably need to acquire more shares to cover their short positions. Eventually, they will run out of momentum as large investors jump in. Shorts know they are running out of time to cover themselves because the price will reverse course in due time. MM's can only manipulate the action for a given amount of time; even they will have to concede to large buy orders when they start stacking up.
Companies spend millions of dollars trying to get FDA approval. NuPathe has succeeded in obtaining the coveted approval. The best part is that they own the patent to the dermal delivery system, which can be used with other already approved FDA medications. While clinical trials would have to be performed for each medication, the FDA has set the precedent in approving their dermal delivery system.
Only God knows when the price of this stock will rise to its true value, but it will increase. With that in mind, I added to my position today and I'm going to see if I can add more next week if the price remains falsely suppressed.
Good luck to you and to all longs who plan on holding for the ride up!
I opened a small 300 sh position today pre-market at 3.81, added a couple hundred more as it faded into the morning. Still, I lost $250 on paper. The same thing happened with ALXA on FDA approval, but they took that stock down and it's still down, trading today around $4.70 when it was $6.30 the day before approval. Personally, I don't see the same level of deterioration here as there, maybe to the $3.00 level max. This stock has such huge potential and I believe there are stonger possiblities of a buyout here than with ALXA, although both companies got a drug delivery system approved. I held my ALXA shares and there is a lot of accumulation going on there now, large blocks AH, like two 100,000 share orders the other day AH. It will happen here as well, within weeks.
This has nothing going for it until partnership whenever that is and sales which happen in 4th quarter, that is why you saw the selloff because it's not worth holding short run. Long term this stock is good but the price will not hold here its obvious.