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Pricing Of The Bovie Offering: So Ridiculous It's A Tell

|Includes: Bovie Medical Corporation (BVX)

With the exception of a couple of brief, shallow dips, the Bovie Medical Corporation (NYSEMKT:BVX) share price has spent nearly the entire past year above $3.50, with a large part of that time spent hovering around $4, and a short spike to $5.

Over the past couple of weeks, the price descended from around $3.65 to yesterday's close at $3.12 - and this despite the good news of the design and manufacturing agreement with Denervex. Was someone tipped off as to the details of the offering?

This morning the pricing of the offering was announced: $2.50 per share. The offering is expected to close on or about March 17, five days from today.

Naturally, this announcement crushed the stock, which is trading at $2.52 as I write.

If one had specifically intended to pick the time and price of the offering to inflict maximum damage to the share price (without being too blatant), this would have been a pretty good crack at it.

Whatever one may say about the changes in Bovie's management over the past year or so, it would be tough to accuse the new people of being stupid. Mr. Gershon, for example, has run an organization in the medical devices field with over $5 billion in annual revenue and he has a background in business development, strategic planning, and mergers and acquisitions. Other important Bovie figures have similarly impressive credentials.

A fellow who had held important management positions in several companies that held IPOs and / or consummated other big deals told once that it was normal on Wall Street that when a large, profitable deal was about to happen, someone in a position to delay or stop it would invariably come along and demand a bigger share of the pie before allowing the deal to proceed.

Is it possible someone did exactly that and now they are picking up cheap shares?

Disclosure: The author is long BVX.