I trade NITE regularly, and I have some thoughts...
I *suspect*, that actually, those 'locked up' shares, are being unloaded. I base this on my observation of the trades on LII - they seem to be unloading them mostly through FBCO. Frankly, good as NITE's rise has been, under normal conditions, I'd expect even more of a rise - look how much more the brokers are appreciating, including its 'brother' SWS, plus earnings are coming up, and every analyst seems to like this stock and upgrades it. I mean, if brokerage stocks are benefiting, NITE should do so even more. Moreover, I've seen buying pressure met with consistent selling, in huge amounts. It was bizarre, unless, additional shares of NITE were coming on market. Here is what I saw: great buying pressure would gather on the bid side. On the ask, you'd see the sellers quickly drop off - except for FBCO which seemed to have an inexhaustable supply. Ordinarily, if FBCO was just trading, what you'd expect, is for them to let NITE run up a little, and then sell their shares for a higher price - since the buying pressure was very good. Instead, you'd see FBCO just sit with a nominal '10' or even '1', and you'd see a steady stream of trades - all on the ask, then suddenly, ONE monster trade, usually well below best bid (meaning it was a sell) pop up - 25,000, or 50,000 shares. Then when finally the buyers would overwhelm FBCO, it would move the price up, by an 1/8 - and repeat the process! That's highly unusual. Ordinarily, when the buying pressure is on, the price would move very rapidly 1 or 1 1/2 points - here, it was as if FBCO had to keep selling, and selling, and selling - one painful 1/8 at a time. Sometimes when FBCO was done, another MM, like CIBC would step in, and keep supplying the shares to sell.
Now, maybe this is all innocent, but I've been watching NITE on the LII for a long time (I trade it every day) - and I'm telling you, this behavior is very strange. It sure seems as if there is a huge supply of shares somewhere, and it is being unloaded. My guess is that these are the shares outstanding being added to the float. Otherwise, I really don't understand it - I mean, I doubt they are all SHORTING NITE, and the shares must come from somewhere.
In any case, this is just my theory, and maybe someone else who has looked at this can add their thoughts.
Good luck!
Morgan |
