Wall street is famous for overreacting but when I see drops of 40% in a couple of days in a stock that was not a high flier to start with I do get concerned as to what I am missing.
Me too!
Could it have something to do with the warrants related to CEO selling shares.
I got this off yahoo message board and I have not verified myself:
"it seems as the warrant holders profit from the lowest price between Feb 1, 2016 and 9 March 2016 (10 trading days after earnings release). All the details can be found on the SEC filling dated 23 Dec 2015 on the Nasdaq website.
(d) [INSERT IN SERIES A WARRANT ONLY: [Intentionally Omitted]] [INSERT FOR SERIES B WARRANTS ONLY: “ Adjustment Share Amount ” equals the greater of (I) zero and (II) the difference of (i) the quotient of (x) the Stockholder Purchase Price (as defined in the Securities Purchase Agreement) divided by (y) 90% of the lowest Market Price during the period commencing on February 1, 2016 through and including the Adjustment Time, less (ii) the number of Stockholder Common Shares previously sold to the Holder pursuant to the Securities Purchase Agreement.]
(e) [INSERT IN SERIES A WARRANT ONLY: [Intentionally Omitted]] [INSERT FOR SERIES B WARRANTS ONLY: “ Adjustment Time ” means 9:00 AM, New York city time, on the tenth (10) Trading Day after the earlier to occur of (x) the later of (A) the initial Effective Date (as defined in the Registration Rights Agreement) and (B) the date of the filing with the SEC by the Company of its Annual Report on Form 10-K for the fiscal period ended December 31, 2015 and (y) such date whereafter all Registrable Securities (assuming the cashless exercise of any SPA Warrants) shall be eligible for sale without restriction under Rule 144 (as defined in the Securities Purchase Agreement).]
Could this be manipulation games or just bad timing for the CEO?
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Statistically speaking, the vast majority of stocks trading below $5 will go to $0. I have seen very stocks get out of that black hole once they get sucked in.
So today it’s up 13.5% right now. Go figure!
PN investors who want to understand what they are investing in might want to wade through this:
http://www.sec.gov/Archives/edgar/data/1619917/0001193125164…
including this part:
There is an increased potential for short sales of our common stock due to the sales of shares issued upon exercise of warrants, which could materially affect the market price of the stock.
Downward pressure on the market price of our common stock that likely will result from sales of our common stock issued in connection with an exercise of warrants could encourage short sales of our common stock by market participants. Generally, short selling means selling a security, contract or commodity not owned by the seller. The seller is committed to eventually purchase the financial instrument previously sold. Short sales are used to capitalize on an expected decline in the security’s price. As the selling stockholders exercise their warrants, we issue shares to the exercising selling stockholders, which such selling stockholders may then sell into the market. Such sales could have a tendency to depress the price of the stock, which could increase the potential for short sales.
The balance sheet is loaded with goodwill and intangible assets. The past revenues included big payments from a separate company the CEO has a relationship with and that will not continue going forward. The “adjusted” earnings entail not merely adjustments for misc. one-time items but also significant ongoing real expenses, such as debt repayment and income taxes.
PN at this price may be the opportunity of a lifetime, or it may be toxic waste. What I know for sure is that it’s way too hard for me to understand.
I’ll pass.
20 Likes
Hi CraigDoc,
Its looks like you may have been correct, and someone was manipulating, pushing the price down to get some kind of profit on his warrants. Right now it’s up almost 19%.
Saul
Statistically speaking, the vast majority of stocks trading below $5 will go to $0. I have seen very stocks get out of that black hole once they get sucked in.
Agree, and I’ve unfortunately ridden more than I should have to $0, but if you happen to get one or two that do come back to life, it sure is nice! Can make up a lifetime of other mistakes.
Don’t get me wrong, I’m not advocating that as an investment style for anyone to try and use, but for me it happened to be with an employer my wife was working for whose stock went under $2, continued getting LOTS of options and ESPP while under $5 for years, then price eventually went back over $100.
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Patriot National Announces Share Repurchase Program
http://ir.patnat.com/file/Index?KeyFile=33214847
We believe the Company’s common stock is significantly undervalued and does not reflect the value or the earnings power of our operating platform, which is unparalleled in the marketplace and positions Patriot National for long-term sustainable growth and profitability, said Steven M. Mariano, Chief Executive Officer of Patriot National.
I like this CEO’s style. He set up a goal for his team to figure out how to create shareholder value and immediately takes action on the no brainer. He also is obviously driven for high growth based on the number of acquisitions in the last year.
$15M at today’s closing price of $4.22 would be 13% of the 27.1M shares outstanding.
1 Like
14 reviews (which is a small enough number that one person could have written them all).
So true. Wish everybody understood that.
I understand the “one person” theory. It’s BS. Think about it. First the mythical “one person” has to go to the trouble of creating 14 (in this instance) email addresses because Glass Door requires a new email address for each member. That, in and of itself is pretty much a discouragement.
But then (in the case of BOFI where I read every comment on Glass Door, I’ve not read these 14 negative entries), not only do you need different IDs, but in order to write numerous negative reviews that aren’t obviously written by the “one person,” you need to create each one with different word choices and syntax, even different misspellings and typos. If you think that’s easy to do, go ahead and give it try.
If you can accomplish that more or less effortlessly, you’re probably ready to write the Great American Novel.
One more observation, I’ve only seen the “one person” theory in defense of a manager under attack. How come I’ve never once seen the accusation of all the reviews having been created by that mythical individual when the reviews are largely positive? Wouldn’t be equally true to disqualify the reviews as invalid if the management is positively reviewed?
In other words, you either accept Glass Door as one of the only ways to get some first-hand insight about management or you don’t. Virtually every other source will be from the manager in question or his PR representative.
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Wells Fargo & Company MN boosted its position in Patriot National Inc (NYSE:PN) by 15.7% during the fourth quarter, according to its most recent 13F filing with the Securities and Exchange Commission.
…
Separately, Brown Advisory Inc. increased its stake in shares of Patriot National by 2.8% in the fourth quarter.
http://www.americanbankingnews.com/2016/03/05/patriot-nation…
Wells Fargo seems to like PN. A good sign of strength.
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Looks like Patriot National has not been doing well lately and will likely go bankrupt soon. Another reason not to hold your stocks forever and to sell when the story changes.
https://www.bizjournals.com/southflorida/news/2017/11/22/pat…
The Fort Lauderdale insurance services company (NYSE: PN) also announced that it has entered a forbearance agreement with one of its creditors after defaulting on a previous credit agreement. Under the forbearance agreement, Patriot National has until Dec. 3, 2017 before its creditor, Cerberus Business Finance LLC, can accelerate its loan payments and exercise its rights on a loan it gave Patriot National.
Patriot National’s filing with the Securities and Exchange Commission on Wednesday painted a bleak financial picture.
The company announced that “a major portion of the company’s revenue and cash flow going forward will cease” as a result of Guarantee Insurance Co. being placed into state receivership. The Florida Office of Insurance Regulation last week deemed the worker’s compensation insurance company insolvent, and said it plans to initiate delinquency proceedings.
Both companies are majority owned by Steven Mariano, who resigned as CEO of Patriot National in July amid a falling stock price and shareholder lawsuits.
In its SEC filing, Patriot National said it had met with the Florida Office of Insurance Regulation to try to collect payment from Guarantee Insurance Co. for its past services while GIC is under state receivership. But after its most recent conversations with regulators, the company said it does not believe it will be able to collect.
Due to this loss of business, the company announced that it would immediately lay off nearly one-third, or 250, of its employees.
On this news, the company’s stock price tanked by nearly 70 percent to 33 cents as of midday Wednesday.
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