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AMPH - Secondary stock offering. Why would this happen?
06-20-2007, 11:48 AM
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#1
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Full time employment: Posting here.
Join Date: Jan 2004
Posts: 851
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AMPH - Secondary stock offering. Why would this happen?
This is not exactly a stock pick, but it is individual stock question...
I've owned a we bit of AMPH for a while...not enough to worry about it even if it went to zero...its been a very slow performer for many years (also very thinly traded)
Anyway, today the company announce a secondary stock offering of 2,100,000 shares at $16.50...and the stock goes up to $18.50 +/-...but I can't figure out why.
Why, if they are going to dump 2M more shares on the market at $16.50, would people be rushing to buy for $18+/share? I sold 1/2 mine, thinking it'll probably drop back down...but maybe I don't understand what is going on....anyone? DSX offers more shares and (as one would expect) the stock drops...why is this doing the opposite?
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06-20-2007, 11:53 AM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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Beats the heck out of me.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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06-20-2007, 12:10 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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These are probably privately owned shares, perhaps a chunk of the startup ownership, being offered for public sale. Hence no dilution. But not exactly a big "buy" signal afaic.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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06-20-2007, 12:37 PM
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#4
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Recycles dryer sheets
Join Date: May 2006
Posts: 230
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It looks like huge volume compared to normal (450k instead of 10k), so I guess someone wanted to buy a large stake?
It looks like 2 of the 2.1MM shares are offered by the company and 100k by the CEO. The underwriter has options for 315k shares for the next 30 days.
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06-20-2007, 01:03 PM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Thinly traded stocks often do the opposite of what you would think. They defy the "normal" rules of how stocks generally operate........
I remember when CMGI and others would have horrible numbers showing them losing many millions of dollars each quarter, but because they were "out buying goodwill" their stock would go up 5-8% that day.......... 
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
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06-20-2007, 02:38 PM
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#6
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,708
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Okay, made me look.
The CEO is offering 300,000 shares. The company has been aggressively buying back its own shares over the last 5 years. Thats probably the source for much of the 2M other shares being offered.
In other words, they used to think their own shares were a good deal. Now they dont.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
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