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Protalex Stock Offering Announcement Boosts Shares, But Why?
Posted on 06/21/2007 08:19:03 | Link | Post Comment
by Hisham S. Ayoub, DMD
BioHealth Investor.com
Shares of Protalex BioTherapeutics (PLX), the Israeli producer of recombinant therapeutic protein through plant cell expression, jumped by 44% on Wednesday following an announcement that the company is planning on selling shares to the public.
The company's board of directors approved the stock offering, but did not disclose the anticipated date of the filing, the expected price nor the overall size of the deal. Yet, investors welcomed the news as volume was 8x the 3-month daily average!
Not surprisingly, shares dropped more than 20% in after hourse trading. I say not surprisingly because who buys shares of a stock on news of a public stock offering, without first knowing the date and more importantly, the price of the offering? I am surprised that the stock took off the way it did in the first place, so the after-hours drop was not a surprise.
Protalex has a market cap of $1.95 billion, so this is not a case of a penny stock gone wild. In my opinion, it seems that someone, somewhere knows exactly how big the deal will be, and traders just went along for the ride.
BioHealth Investor.com
__________________
BioHealth Investor.com
Shares of Protalex BioTherapeutics (PLX), the Israeli producer of recombinant therapeutic protein through plant cell expression, jumped by 44% on Wednesday following an announcement that the company is planning on selling shares to the public.
The company's board of directors approved the stock offering, but did not disclose the anticipated date of the filing, the expected price nor the overall size of the deal. Yet, investors welcomed the news as volume was 8x the 3-month daily average!
Not surprisingly, shares dropped more than 20% in after hourse trading. I say not surprisingly because who buys shares of a stock on news of a public stock offering, without first knowing the date and more importantly, the price of the offering? I am surprised that the stock took off the way it did in the first place, so the after-hours drop was not a surprise.
Protalex has a market cap of $1.95 billion, so this is not a case of a penny stock gone wild. In my opinion, it seems that someone, somewhere knows exactly how big the deal will be, and traders just went along for the ride.
BioHealth Investor.com
__________________
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