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  • NGSX - primed for a bounce? 0 comments
    Jun 25, 2011 4:42 AM | about stocks: NGSX

    Over the past 10 days or so NGSX has experienced some unusual market activity.
    After the company anounced it has completed enrollment for its Phase 2 trial for the liquid oral application of its pain management drug, the stock shot up to over $4 a share on HUGE volume on 6/16/11 only to settle back below $2 after a few days (still with relatively heavy volume).
    With Sphera hedge funds consistently selling their positions (at one time over 10% , it looks like the pressure of the past few months is almost over.
    Today's trade was pretty active too and at the close a block of over 600,000 shares changed hands at $1.98/share.
    If this is the last (or close to it) of Sphera's liquidations , it may be the catalysts to enable this beat up stock a significant rally.
    There is a pretty significant short position on the stock, probably by investors who speculate that the company will need to raise further funds to finance its FDA trials and marketing expenses for its already approved drug in the US.
    Those shorts hope to cover through a secondary or PIPE offer at lower prices than they sold the stock short.
    However, as the sharp move higher on 6/16/11 has shown, any good news can and probably will move this stock dramatically higher given said large short position and now that most of Sphera's holdings are out of the way, the road may be clear for a more orderly move higher.

    Stocks: NGSX
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