That made me laugh. Basically, I'm saying compare a 6 week line chart with the 6 week daily candle chart and you"ll see that on November 7th, there were a lot of existing longs who retgretted NOT selling at the open and there were many NEW retailers long who've been under water holding positions taken that day through the reversal and they've been IN GERN into today's open. Many of them sold. That's what I'm trying to say -
By the way, the fact that the parabolic move on November 7th climbed above $7 to finish at the low of the day is actually an important clue to why there was a sell down on the parabolic move earlier today that ran out of steam. Essentially, there's a 4 to 5 week cup-w-handle dynamic (just dynamic) in which the buyers who got caught buying into the climb on Nov 7th (or existing longs who held through the climb and reversal that day and have held since) sold into the climb or on the reversal at the open in fear of a similar under water window ahead when they saw the chance to get out essentially even or slightly up or down once it started to reverse. It means those sellers are essentially out, and as I hoped to point out earlier, it requires a reversion to the mean to some extent in order to clear out those sellers, to return shares to the market as potential buyers for the next run. On continuing good news, as long as the share price doesn't break down severely (I've seen bear raids orchestrated right as a fading volume handle had formed at which point buyers would come in to take a share price through a pivot point to higher highs (QCOR on the first epic bear raid by Citron), then on increasing volume (buyers have to come in w some short covering a component of it as well), GERN can go to new highs. Will it fade to $5 support before it becomes attractive to new buyers at the point when the selling has nearly fully ended? We'll see. Would they love to fill the gap on the original parabolic move from areas well below $5 ($.4.50 range?)? Absolutely. Right now, the pps is 200% above its 200MDA. It's come a long way. BUT, getting the potential sellers today (the buyer on Nov 7th and longs who rode through that and felt regret NOT having sold on Nov 7th out of the way is positive in terms of clearing the airspace above.
Through a Dark Pool and posted. Didn't affect PPS in real time as the shares put together in order to have the trade executed are the CONSEQUENCE of the disruptive climb and sell down earlier today.
Amidst anemic intraday volume relative to the open.
A huge cover agreed to between a Market Maker and an institutional short, or an indication of accumulated shares by the Market Maker sold to an institutional long.
BIG TRADE and it is the dominant BID-ASK of the day from what i see. The bear raid clearly (or speculatively)
fueled and facilitated this transaction. At these prices, it was a potentially bullish transaction for longs.
And retail longs looking to come in off of lows today, do not be confused with some retail short covering or retail day traders coming in on intraday narrow range momentum to trade out several % above entry points. These are players that leave some retailers under water when the dust clears VERY QUICKLY.
And, of course, they can raise more money with fewer shares issued at these levels, so it gives the company much more leverage. Also, gives them leverage to raise money through a private placement of shares with an institution at a price premium (downside) to where it's trading. If it's a bullish story, and this IS, there's incentive to get a heavy institution on board who's done their research (institution's prop desk can also short the existing pps down to that price as well as it will often test it once).
And you are absolutely right. IF there's surprise breakthrough news regarding pursuit of Accelerated Review, additional data, partnership potential (immediate cash infusion and subsidizing of clinical and marketing costs down the road) at any point, the terms change here with heavier upside potential on that news. This is a bear raid for the sake of accumulation, potential covering on the potential of stronger information than released as of today. If little new information is given, this bear raid sets up a retail psychology that what has been presented to date IS built in and here at the end of the year, retailers may capitulate to some extent if there's a slow fade. It's certainly what the shorts want. It's likely what the MMs want. The company is likely extremely happy as their capitalization is substantially higher, de-listing is presently off the table, and the share price is above $5 (institutions often will choose not to buy some stocks below $5 if positions aren't able to be margined I believe). Above $5. this can be shorted, which explains, for other reasons discussed, why the short interest has climbed on a run from $1+ to $7+ at one point only recently. I imagine the short interest actually goes up on today's parabolic opening.
Also, based on analysis of cash position, quarterly erosion of reserves, with costly clinical work ahead, with the recent great news and clinical data presentation imminent, combined with statements made in the 10Q regarding the selling of common shares into the market at any point based on substantial costs ahead, shorts may be anticipating dilution and a lower share price near-term. This is all speculation, but it's part of the playing field. $1.11 on JUNE -
Just took a look at NASDAQ Short Interest numbers for GERN. DOUBLED over a two week period to 10M+ shares shorted from 4M+. These are important clues. After such a great run, coming into the end of the year, when combined with the idea that some of the potentially transformative news is built in, combined with natural end-of-year profit-taking, and when combined with a bear raid with stop losses taken out methodically, and when combined with an abatement of new buyers (as opposed to day-traders and momentum intraday traders who'll come in on days like today), a vacuum is created in which heavier short interest can create momentum in terms of BID erosion because buyers don't step in. These are the dynamics that could easily take this to $5. - It could be where shorts do some covering, where new retailers take long positions, where MMs have built in major profit having sold shares higher and shorted off of parabolic highs (twice in 3 months), and where day traders and momentum traders push the ASK as well. These are the components of the REVERSION TO THE MEAN. All players contribute -
This was $1.11 in June, less than 6 months ago. Recently, it's traded 6 to 8Xs that value. If you only see intraday charts or recent daily charts (last 3 months), you lose perspective of reversion to the mean arguments that point to rational technical re-tracements. The technicals for eventual price movement actually get stronger were this to establish a new base there. As several posters have referenced here: What is built in here near-term? Do they need to raise money and will they take advantage of the hyperbolic 6 month move? Speculating (because we couldn't know), is the Market Maker strategizing, based on a potential private - placement Secondary at a fixed pps well below where the pps is trading at some point, to short shares where GERN has traded recently TO THAT PRICE? Adding shares to the float, either way (private placement at a downside premium to where the pps on any negotiated date for an agreement as incentive for an institution to buy shares OR at market), represents a lower share price temporarily IF it is the case. These are the things to at least consider. At these levels, UNLESS there's extraordinary news COMBINED with extraordinary short interest (and the stock is no longer at such a low share price that it risks receiving a de-listing notice, but it is at a higher enough share price that it's possible that short interest could increase because of its recent run off of such lows), which were to induce a parabolic covering temporarily, my point is that AT THIS EARLY A STAGE, reversion to the mean is always at play. It's an important part of the playing field. Look at long term charts, and it's extraordinary how often after major moves, a stock's price will retrace to fill some gaps long-term (not always of course), retracing to the strongest long-term support level before continuing a climb. You won't have that perspective on a 3 month daily chart.
" In October 2012, we entered into an At-The-Market Issuance Sales Agreement, or sales agreement, with MLV & Co. LLC, or MLV, which provides that, upon the terms and subject to the conditions and limitations set forth in the sales agreement, we may elect to issue and sell shares of our common stock having an aggregate offering price of up to $50.0 million from time to time through MLV as our sales agent. We are not obligated to make any sales of common stock under the sales agreement. To date, we have not sold any common stock pursuant to the sales agreement.
We estimate that our existing capital resources, amounts available to us under our equipment financing facility and future interest income will be sufficient to fund our current level of operations throughAT LEAST THE NEXT 12 MONTHS. However, our future capital requirements will be substantial. Changes in our research and development plans or other changes affecting our operating expenses or cash balances may result in the unexpected expenditure of available resources. "
AT LEAST 12 MONTHS - This language brings us to where we are today essentially.
Very often on these pps moves early on in these R&D stories MEANS RAISING MONEY THROUGH A SECONDARY. In retrospect, it's the culture of these small companies, and on that announcement, retailers suddenly have clairvoyance and punish themselves for not having taken profit. Be careful of hyperbole on message boards. You're better off reading updated 10Qs.
There's a confluence of events taking place here in relation to price action.
GEERN has had an extraordinary run near term, and in relation to Fibonacci Retracement patterns, it makes sense that there's a reversion to the mean to some extent. Reasonably, this could retrace to $5 and on a one-year chart, it shouldn't spark outrage. There's always profit-taking by retailers and the Market Makers always tend to short shares they've distributed on extended moves to the upside. It's the way the market works. It's actually a component of consolidation and a re-setting of supply and demand in terms of generating new demand for shares, even if it means taking out stop losses set by retailers and creating cascading moves to the downside temporarily.
This is essentially a bear raid, which requires stop losses be taken out, and it also forces retailers who have major profit built in to capitulate to some extent. Some retail longs will add. Some will be traders around a core position. Some will just take profit on a long climb from below $2. this year.
It's also end-of-year. There will be profit-taking regardless of near-term potential upside. The prop desks of the market, and the Market Makers as well, rely on the most players being hurt in order to extract profit. Many retailers came in long here seeing $7-8 today based on a test of the parabolic move in November. Didn't happen today so far, but this is being shorted and attacked in order to ACCUMULATE. Bear raids are often BULLISH, but there's carnage on the road along the way. Great story long. Presentation is important. How much is built in for now? Do they need to raise money (after reading recent 10Q, the ability to issue shares is in place already)? Do they take advantage of a 200% climb this year considering where they were? Retailers have done well here recently. Profit is prudent w re-entry on a newly established base ($5.00+).
Good post. Strong view that there is a long fundamental story here as well as a dynamic related to trading and momentum trading /movement in the market. THIS VIEW is the way to commit to the markets. It creates opportunity from a trading perspective short-term and represents stability in perspective in existing positions long.
That's exactly right in my view. Shorting and covering , shorting and covering.
A lot of momentum here and the jobs number looks good with the indices / futures up today, so no heavy down draft at the open at least, but it is Friday.
Big growth potential here, but it's come a long way in a very short time.
And a huge group of shorts who've shorted this off of the highs yesterday will be covering on a legit uptick off of the $4. base once it's confirmed.
Big mistake. $4 is likely the new base after the Offering.
Action usually gets it there even if briefly. MM shorts it to that level and goes long there. Market comes in there. No one's coming in at 10-15% premium to secondary price. Be careful here in pre-trade. Bullish in the sense that the secondary price is decent as a new base.