Looks to me like the selling over the past few months has been leading up to this underwriting.
"The underwriters have an incentive to temporarily depress the stock price during the pricing period. This will lower the issue price and thus provide extra profit on the underwriter’s stock allocation assuming the price bounces back from a temporarily depressed state."
In this instance the underwriter has incentive to maximise the number of un-exercised options. Why? there is arbitrage in the market. If I know I would be able to pick up all unexercised options for 25c a share but the share price is currently sitting at 26-30c, I would inherently sell those shares to pick up any options. This is a win win scenario for underwriters as they stand to arbitrage.
Cheers all DYOR and GLTAH.
Looks to me like the selling over the past few months has been...
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