Dale,
I found this interesting little gem in a footnote in the S-3/A, which probably explains the weakness in the stock over the last few weeks. It also explains some of the recovery in the stock price, because conversion may have begun, and short selling has eased.
From footnote (4)
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<<The Selling Stockholders may use the shares of Common Stock offered hereby to cover short sales of the Common Stock if such short sales occurred on or after the date of their purchase of the Series 7 Preferred Stock. >>
In other words, there was probably significant shorting by the new preferred share holders (holders of series 7 stock) prior to the S-3 being deemed effective. In which case, the preferred share holders can now cover using stock that they get from converting the preferred shares to common at this low price. Once they cover all of their shorted shares (extracting all the money they put in plus some), they may end up with millions of extra shares that they can hold on to, or sell immediately.
So, all of the "conspiracy theorists" that cried "market manipulation," may have been partially right. Its just that SyQuest asked for the manipulation. In that light, doesn't it seem a little odd that SyQuest officially stated that they thought the weakness in the share price was because of general weakness in the sector?
SyQuest keeps hanging their shareholders out to dry, but even worse their shareholders keep letting them. |
