They announced tonite that the offering was even weaker than most expected only $40.50 per share. That means about 26 million new shares floating around that were bought by investors who thought they were buying at a discount. But now the stock is trading at that price after hours and will surely dip lower tomorrow. Many of the 26 million new shares were bought by people who tought they could flip them quickly for a small profit, but when they see there is no profit they will be dumping them to get out before others sell and that means the stock drops below $40.
It will be lucky to hold $36 in the coming days. Buying early to try to get a bargain has resulted in losses for many investors today. Smart investors know the bottom is lower and to be patient.
I believe the stock offering was priced at $40.50 in order to create tremendous resistance at $40.00. The new $40.50 stockholders will gobble up any shares under $40. I'm sure these "insiders" were counting (maybe hoping) on perhaps a $10 per share increase to above $50 per share by the end of the year, then sell in January. They are not going to sell in a panic if the stock drops below $40.
Who know what tomorrow has in-store with our market's uncertainty day-in and day-out, but after seeing this news ($40.50 a share) I must say that I regret covering my short position today at $41.04, because I see more down side coming (at least to $40.50).
let me clarify, yes many of them would have sold but it would not have been the kind of sudden selling we will probably see over the next two days. It's one thing to buy and have a profit that makes you comfortable enough to hold off on selling or not sell it all. It's quite another thing to realize you have no profit and now must sell immediately to avoid what could be significant losses. This is going to create a sense of urgency for these new shareholders to sell. They bought at $40.50 and many will probably cut losses even if it means selling for $38 or less.