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OEG dilution, HIMX movement and weekly claims ?4

16:03 31-Dec-20

The Xebec halt was merely over the completion of the HyGear transaction as already tipped by the closing of financing yesterday.  Perhaps the halt is necessary for settlement of the subscription receipts (essentially warrants) on Canadian exchanges.  Otherwise, I see little reason for the halt as this is a non-event.

Of more interest to me is news that Republican Senator Purdue of Georgia is having to quarantine due to COVID-19 exposure.  It's too early to see what effect this will have on the runoff, but with any extra stimulus apparently dead in the Senate, we've seen a reversion toward €/$1.22.

Xebec trading has been halted at the company's request, pending news, again.  XEBEF and WPRT are two of the other short squeezes I was referring to below, with rebate rates hovering above 10%.  I suppose we'll know in a couple of hours (note the Bond market correction at the bottom), but I will be  a little disappointed if this is merely over the second acquisition that was expected.  

On 12/31/20 9:17 AM, Esekla wrote:

Orbital Energy Group has placed over 5.5M at $1.80 each to raise $10M and dilute existing shareholders by 17%.  Although not stated, presumably about a quarter of the proceeds will go towards pre-paying the convertible loan that the company issued.  Otherwise more dilution is on the way.  OEG is down 11% to $2.09 so far in pre-market trading.  My guess is that we'll see them below the $2 mark, despite the rebate rate staying unchanged at 47%; between this and stimulus, Orbital has what it needs to keep going into the second half.  However, vaccination efforts indicate that it will probably need that long.  Expect a bumpy ride in the meantime.

Another stock that's been seeing dramatic movement is HIMX.  Unlike OEG, VUZI and others, this does not seem to be a short squeeze.  Year-end window dressing makes for some strange moves and manipulation via options may also be playing a role.  Fundamentally, LCD shortages have caused Samsung Display to delay its plans to discontinue that segment of its manufacturing, which is positive for Himax.  More broadly, electronic component shortages of all sorts have continued, and even gotten worse as demand continues to be high.  This environment figured into the last set of good results and the market may be looking for more.  I had originally been looking for shares to move up to $6, though in Q&A with subscribers, I had already acknowledged that a move up to this point seemed plausible.  I can't be confident that anything further is actually justified.  However, HIMX has always been volatile, with big swings in either direction, and this market is not fundamentally driven.

Weekly jobless claims also came in lower than expected this morning: 787K filings vs 835K projected.

Bond markets close at 2pm today, and it is also the last day to switch to credit card payments and get a free month.  Happy New Year everyone!

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