Check the news after hours - makes no sense unless they have a private investor that is going to take the entire share offering.
It closed at $9.99 today - $2 pre-split and they are offering the shares at $6.25 - how does that make any sense at all?
If we can get shares at $6.25, what do you think?
Nothing in particular - just that it would be averaging down and we have a good grasp on what the trading range was before/after the reverse split. I agree with you, this share offering really doesn't change anything - they are raising cash and they're profitable - just goes straight into the bank for now. So, we buy at $6.20 to get in to the position, and then average down maybe at 10% intervals barring any negative info along the way.
If it doesn't get there, then I just hold what I have until I'm happy with the return for whatever the timeframe is to get there. If additional news comes out maybe I buy more at a higher price if warranted. Also depends on what the rest of my portfolio looks like at the time.
It makes sense as these offerings are usually at discount. - usually theres significant volume pre-offering to enable arbitrage - not this time. Given that use of funds is for company rather than insider sales and given the company's profitable operation, I think its a good deal. I just bought a little. Thanks for the heads up