Re: [CANSLIM] Any common trading patterns after a secondary offering?

From: Sol Mayer <smaye1211@yahoo.com>
Subject: Re: [CANSLIM] Any common trading patterns after a secondary offering?
Date: Wed, 20 Nov 2002 07:19:01 -0800 (PST)
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I don't know whether BVF is the best example as I think they had some regulatory issues in the interim. But I'm a little biased as I'm stuck in FOX which just announced a secondary and I'm in a little quandry as to what to do.
 Katherine Malm <kmalm@earthlink.net> wrote:Hi Ian, I've read financial studies that conclude that in the near term, a stock will fall on the secondary offering while the market absorbs the additional shares. In the long run, however, the stock performance depends more on the ability of the company to expand their revenue/earnings. In other words, the same thing that creates the underlying value for the shareholders in all cases. If the offering is a primary, where funds actually go to the company, it becomes particularly important, as the investing community looks for evidence that the company has effectively utilized the funds for growth. I can't be of any help on the near-term trading patterns, as I haven't seen any specific studies on the phenomenon. I've uploaded a chart of BVF, which we discussed here on the CANSLIM list last year about the time they announced their secondary offering (approx mid-November). From what I've observed personally, this is a pretty typical chart pattern. See it at: http://WallStreet-LLC.com/canslim/BVF111902.JPG Katherine ----- Original Message ----- From: Ian To: canslim@lists.xmission.com Sent: Tuesday, November 19, 2002 9:49 AMSubject: [CANSLIM] Any common trading patterns after a secondary offering?
i all:

I was wondering if anyone had any real experience following stock trading
patterns after issuance of a secondary offering? What is the typical pattern
after the initial volume surge? Assuming that CANSLIM fundamentals, and
quarterly results are strong, will there be a lag before a price move? Is it
goof or bad for the near-term price action? Does it matter if the pricing
was a little below or above the previous days close? Is there something to
watch for on volume? Any input would be appreciated.

Than you,

Ian



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<P>I don't know whether BVF is the best example as I think they had some regulatory issues in the interim. But I'm a little biased as I'm stuck in FOX which just announced a secondary and I'm in a little quandry as to what to do.
<P>&nbsp;<B><I>Katherine Malm &lt;kmalm@earthlink.net&gt;</I></B> wrote:
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<DIV>Hi Ian,</DIV>
<DIV>&nbsp;</DIV>
<DIV>I've read financial studies that conclude that in the near term, a stock will fall on the secondary offering while the market absorbs the additional shares. In the long run, however,&nbsp;the stock performance depends more&nbsp;on the ability of the company to expand their revenue/earnings. In other words, the same thing that creates the underlying value for the shareholders in all cases. If the offering is a primary, where funds actually go to the company, it becomes particularly important, as the investing community looks for evidence that the company has effectively utilized the funds for growth.</DIV>
<DIV>&nbsp;</DIV>
<DIV>I can't be of any help on the near-term trading patterns, as I haven't seen any specific studies on the phenomenon. I've uploaded a chart of BVF, which we discussed here on the CANSLIM list last year about the time they announced their secondary offering (approx mid-November). From what I've observed personally, this is a pretty typical chart pattern. See it at:</DIV>
<DIV>&nbsp;</DIV>
<DIV><A href="http://wallstreet-llc.com/canslim/BVF111902.JPG">http://WallStreet-LLC.com/canslim/BVF111902.JPG</A></DIV>
<DIV>&nbsp;</DIV>
<DIV>Katherine</DIV>
<DIV>&nbsp;</DIV>
<DIV>----- Original Message ----- </DIV>
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<DIV style="BACKGROUND: #e4e4e4; FONT: 10pt arial; font-color: black"><B>From:</B> <A title=ianstm@shaw.ca href="mailto:ianstm@shaw.ca">Ian</A> </DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=canslim@lists.xmission.com href="mailto:canslim@lists.xmission.com">canslim@lists.xmission.com</A> </DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Tuesday, November 19, 2002 9:49 AM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> [CANSLIM] Any common trading patterns after a secondary offering?</DIV>
<DIV><BR></DIV>i all:<BR><BR>I was wondering if anyone had any real experience following stock trading<BR>patterns after issuance of a secondary offering? What is the typical pattern<BR>after the initial volume surge? Assuming that CANSLIM fundamentals, and<BR>quarterly results are strong, will there be a lag before a price move? Is it<BR>goof or bad for the near-term price action? Does it matter if the pricing<BR>was a little below or above the previous days close? Is there something to<BR>watch for on volume? Any input would be appreciated.<BR><BR>Than you,<BR><BR>Ian<BR><BR><BR><BR>-<BR>-To subscribe/unsubscribe, email "<A href="mailto:majordomo@xmission.com">majordomo@xmission.com</A>"<BR>-In the email body, write "subscribe canslim" or<BR>-"unsubscribe canslim".&nbsp; Do not use quotes in your email.<BR></BLOCKQUOTE></BLOCKQUOTE><p><br><hr size=1>Do you Yahoo!?<br>
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