erb71
Oct 24, 8:33 AM
$XXII As in almost all other ATM cases, one factor may be overlooked again, benefiting no one except shorts. That is the cash injection that strengthens the balance sheet. Here, the injected cash exceeds what the company had at the end of Q3 and likely extended the cash runway to ~6-8 months, or more if business operations continue improving, as they did in Q3.
Therefore, the sell-off appears to have gone way too far, driven largely by heavy shorting.
The average price at which they sold the new shares was ~
$0.30 (
$4.7M/~15.8M). Yesterday's VWAP was ~
$0.37, whereas the latest on-screen AH price was
$0.125, indicating a massive discrepancy.
I asked an LLM to estimate how much the newly raised capital is expected to mitigate the dilution effect. Its response is attached.
Shorts who drove such a large part of the pullback, significantly diverging from the part explicable by the new issuance, may have accumulated millions of short positions and laid the groundwork for a fierce squeeze.
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