Let's evaluate the options for the price slide:
A. Someone is selling everything they have
B. Someone is shorting against their shares
C. A toxic convert is taking place
In just the past three days, we've seen about 8 million shares change hands. Does any one person have that many to sell? Not according to Ga Bard's research. And of course the selling has been going on for far more than three days. This rules out "A", IMO.
It could possibly be that someone is shorting against their shares, or, rather, started shorting against their shares and is now just shorting naked since they've been so successful at killing the price. I tend to doubt this as people that would own large blocks of shares would more than likely be "friends". This rules out option "B", IMO.
This leaves option "C". Ga Bard and others say in no uncertain terms that a toxic convert has not been done. I've heard CEOs outright lie about these things before (TPII is one that comes to mind), so I still don't rule this possibility out. I'm not saying the CEO of ORXX has lied; it could be he just doesn't know exactly what kind of financing deal he got himself into with the 504. We need to know these terms.
The limit on a 504 is $1M. At .05 a share, this would mean 20,000,000 new shares, enough to probably cover the short down to that price. If true, it also means this person will effectively control ORXX. Normally the day of conversion the price pops up dramatically. If the company is in on it, a series of PRs quickly follows to pump the price back up.
Let's watch and see what happens. ;^)
- Jeff |
