how to lower the price of a share from $ 26 to $23
When the price is at $26, offer millions of shares at a lower price, say $ 23; that's what today's offering did. What's going on? Why didn't it just let the market set the price? Perhaps management decided to screw the present owners or is just incompetent.
Yes, very odd maneuver. As an investor/shareholder I'd be scratching my head.
Maybe they did it this way because they were thinking:
1. if that many shares were dumped on the market at one time it would cause much more decline in the stock price - with daily volume around 100,000 shares it would be difficult for the market to absorb so much?
2. Because major selling shareholder was dumping so many shares maybe a single buyer could not be found to take the entire block where it could have been entirely handled privately?
3. If it were just sold off slowly at maybe 100,000 shares a day it might also cause concern as the major shareholder would need to be filing Form 4's with the SEC daily for about a month
4. Maybe this had already been planned and they took the average closing price for a period of time before announcing? Figuring that would have the best chance of selling the entire amount of shares without too much disruption?
In any case, here's who sold the bulk of those shares. Company just tagged along offering up some shares of it's own to raise some money in the process as well.