Darwin Warrants Overhang Cleared


11 April 2018

Following Mondays article about a mini-overhang arising from the forward selling of the 7M Darwin warrants on Tuesday the 10th we have seen a very clear sign of the clearance of this overhang.

First the trading analysis for Tuesday:-

Things are relatively ordered until 1 oclock, albeit trading is still already at the very strong levels we have seen since the March clearance of the Erongo overhang.

However around a quarter past one, around the point of the leftmost green marker,  the behaviour seemed to change - this was at the point that the nett trades level reached 0.9Million more Buys than Sells.

It seems that this is the point that the Market Makers realised that even with the c. 2M remaining shares from the Darwin block they would not have sufficient shares to feed the days Buys - despite dropping 250K sells from the Darwin Block in at 13:16 and 13:18 they were also forced to increase the Share Price to try and buy more shares in the market. 

This worked for a bit - with two more 250K sells coming in at 13:50 and 13:54 they were able to knock back the nett trade position from +0.9M to less than zero.

This would have worked except for the fact that we noticed - and buying accelerated - the nett trade position climbing from -0.35M to +0.35M between 2pm and 3pm. Another 250K sell at 15:01 worked for a bit, then another was needed at 15:53, and then a final one (the seventh) at 15:58.

7x 250K Sells = 1.75M - very close to the 2M predicted to be remaining from the Darwin Warrants block, which by the way, was only due to have shares formally admitted to the market today.

Quod erat demonstrandum - Darwin extincti !


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