A few minutes past 12:00 Friday afternoon, a block trade of over 3 million shares of Bronco Drilling Company occurred. This single transaction alone, accounted for volume over 5 times the daily average for the past three months and represented an exchange of more than 10% of Bronco Drilling’s current market cap. Anytime a trade of such magnitude occurs, it is necessary to look into.
To my knowledge, there exists only one shareholder who could have potentially executed such a large sale, Wexford Capital LLC. While an SEC Filing wont be made until Monday, it looks as if they have unloaded their remaining stake in Bronco. Under normal conditions, such extreme selling pressure would be a cause for concern, however this was an event that has been anticipated for months.
Considering this knowledge, two positives can be drawn from today’s action. Firstly, the overhead resistance that Wexford’s planned unloading has caused has been lifted. Secondly, from a technical perspective, such extreme volume as was experienced today often represents a bottom in a stock’s movement. With Wexford finally out of the way, Bronco may be ready to run.
Disclosure: The author has a long position in Bronco Drilling Company.