For the sake of argument let's assume that yesterday's selling was NOT (perish the thought) partly comprised of sales by investors who had the benefit of a private guarantee from the Insmed BOD that if they sold on the news, the BOD would line their pockets at our expense via a share offering at a lower price.
The Nasdaq site shows the total volume of shares traded yesterday as just over 7.8 million shares.
As usual I'd welcome input, but my personal gut feeling is that the majority of those trades (5 million?) would have been by professional investors selling and subsequently buying back.
Another chunk (0.8 million?) would have been by momentum traders interested only in the anticipated rise on the news, who will have sold and won't look back.
The remaining 2 million (perhaps a lot more?) represent money in the bank for us - shareholders who sold because of the drop, but know the stock quite well and will buy back their shares for much the same reasons as they bought them in the first place.
And what of the Short position - 3 million shares as of mid-March?
I wouldn't be surprised if investors with Short positions bought back a million shares yesterday.
But that would still leave a total unsatisfied demand of 4 million shares (going by the figures I've suggested).
And the problem those investors now face is that yesterday's drop was little more than a trading scam. The Nasdaq site displayed a prominent article heading along the lines of -
INSMED'S DRUG FAILS IN EARLY-STAGE CLINICAL TRIAL
However I'm pretty sure that very few shares now are not in the hands of investors who understand Arikace is all but guaranteed after yesterday's news to be approved both for Cystic Fibrosis and for NTM on the basis of the data already in the bag.
We'll still see a high volume of trades by investors trading in and out. But if not the Insmed BOD - who is now going to part with four million shares at anywhere near the current price?
I think you are right on. There were several NASDAQ articles that popped up "drug failed" but never talked about meeting secondary endpoint. When I read the release when it was finally posted I had to question whether I'd read correctly or not. I'm noticing this a lot lately with other stocks too that I am in. It seems really fishy to me.
Probably a little of many things, some you mentioned. We had a "perfect storm" hit NasDaq and BIOs yesterday with another sell off. All the news, but a few articles, Highlighted the word "missed" or "failure" so emotions ran into negative feelings toward Insmed. I looked at Etrade and we added one or two major holders (if this is current today) but the shares owned only went up to almost 33K (32.9K). Today we have ventured back into the low $17's for awhile. The PR did lead off with missing the Primary so not sure why people stopped reading beyond that. thx for posting these thoughts.