How about this for some strange activity. About 2 weeks ago I buy 500 shares of APPN, and then a few days later my broker (Schwab) emails me asking if I want to lend my shares back to them for 24% per year, accrued daily and paid monthly. I'm like what's the catch? Now I know this could be someone shorting the stock, or someone with warrants who wants to lock in the recently high prices. As I am executing the stock loan, the interest rate was recast to 49%!! So now I go back and buy a bunch more shares spread over a few accounts so that I can get the same deal. Sure enough, but the new interest rate rose again to 68%, and my original shares also received this rate. All the time last week, the market makers were walking it down, gapping down in the morning and the closing it at the low. Volume is also drying up. Oh, and after all that happened last week, I get an email Friday night changing the rate to 85%!!! I kid you not! But this tells me that someone is desperate to get this price down and I don't think it is someone with a straight short play here. I think someone wants to drive the price down so that they can acquire the amount of shares that they truly want to buy. Remember when the stock price hiked up to $43 earlier this month? I bet that was the buyer trying to flat out buy volume and it spiked the price. So this person's strategy is to short the heck out of it in hopes of being able to acquire more shares at lower prices. We'll see. I may just put in a few limit buy orders for some more shares in the upper 20s in case the drop goes below that. Any thoughts related to the craziness I describe above would be appreciated. How to play this? Watch how the stock price slowly sinks, and then jumps on any kind of green volume. Nobody wants to catch a falling knife unless you're getting paid 85% while it happens. 60MM shares authorized, 7MM shares owned by institutions, 28MM shares owned by the founder, and as of 1/24/18 the short interest rose from 1.7MM to 2.5MM shares in 2 weeks!!
Got the same e-mail from Schwab.....never happened before. Bought on rec of Motley Fool; will go along for ride!! Interesting.......
Interest rate now at 99% as of Friday night email. These stock loans typically go from 3-6 months in duration but each situation has its own reasons for why someone would pay such rates. With a 99% rate, I don't expect more than a month, but that is still an 8% return. I've watched the price spike whenever a chunk of buy orders hits the screen, which is what one would expect for a stock with a float of 8MM and 7MM are already in institutional hands. Makes me think my shares are worth a great deal in the future.
They are going to try to shake the shares out of weak or leveraged hands in the next few weeks. But once it is allowed to run...
So I bought APPN a few weeks ago and share your sentiments about the recent unexplained drop. While I haven't bee contacted about selling/lending my shares, I'm curious if you have any additional thoughts or if you've been contacted again. It's just inexplicable...other than the possible explanation you suggested. Thanks for any additional insight. #down25%andholdingon
Hey Jim, my broker just lowered the stock loan interest rate to 85%, so I think this is starting to unwind. I also checked the news for APPN and low and behold, there are 2 SEC filings... 1 on Jan 29 and 1 on Jan 30. Looks like some deep pockets are doing a private placement of shares. The kind of deep pockets who would short the stock to get the price lower, so they don't have to pay spiked prices. One is New Enterprise Associates, Caymans and the other is Novak Biddle Venture Partners V L P. The filing showed 10MM shares and the other was less than that but still big. If there are other partners for the other shares (up to 60MM authorized shares), the short may remain. It did drop $1.20 today so it is likely to still be downward pressure for those deals to close. Then...
Thanks for the intel. Great insight. I'm long on APPN so I'm hanging in there. Assuming you are too..??
http://archive.fast-edgar.com//20180129/AU2U222CZ22C92Z2222A...http://archive.fast-edgar.com//20180129/AU2U222CZ22C92Z2222A...1-29-18 New Enterprise Associates (from Timonium) purchased 2.724MM Class B shares which have 10X voting rights, and convert 1=1 to Class A shares at any time. APPN and other companies typically do that to place shares in "friendly" hands so they can control the votes. 1-31-18 Novak Biddle VC (from Bethesda) bought 10.248MM Class B shares, including shares that went directly to the owners/founders. Their play is to short some shares to drive the price lower, and which you can then buy a large amount of shares at that low price. There could be other VCs and private placements of the remaining shares.60MM authorized shares11MM Class A49MM Class BI received my broker's rate reduction email (from 99% to 85%) on Jan 30 at 8:40AM, yet today the price dropped another $1.20. Until the private placements get completed, there will be DEEP pockets very capable of suppressing the price until they get their deal(s) done. New Enterprise Associates bought 2.724MM x $30 share price = $82MM. And Novak Biddle bought 10.248MM x $30 = $307MM. Both possibly received some discount for their volume purchase, but we are still talking large investments into APPN. This is all ahead of their earnings report on February 22.Summary: If I weren't already over weighted in shares, I would buy more as I think we're seeing the low soon.
Wow! Thanks again for all of your deep dive into weeds of what's really going on. Your intuition on what's happening make perfect sense...actually, its the only plausible explanation of what's going on from what I can see, read and interpret as there's no ominous news or reports about APPN. The VC's play to short shares makes me feel good about the investment. I may buy a little more, we'll see. Thanks again so much for the great intel, research and perspective on APPN. It really helps to have others like you (smarter than me) with an acute sense of what's going on below the surface. Best, Jim
Thanks Jim. I needed to do the research as in addition to my trade, I've recommended APPN to an investor club I started at work for colleagues who invest in individual stocks, and they've been following it. Had 2 of the guys make some money on the spike over $40, and now they're watching and waiting on the sidelines. Time for them to start nibbling. And who knows... I've got some dry powder to throw at this and may end up getting some more.
Interest rate dropped to 65% as of last Friday 8:13AM. Once the deep pockets is no longer shorting the shares and paying me interest, then that's the time this stock will start to fly higher.Me... I'm not greedy. I'm just looking to get my beak wet!
Interest rate dropped to 53% and I predict will go to zero after Wednesday, when the Novak Biddle deal closes with a 5 day average price ending on Wednesday. I bought more shares today at $27.53 and $27.58. Pretty sure that these deep pockets want to see the price run after they are fully in at their depressed price per share.
Unfortunately, I jumped in when it was at $40 so I am patiently hoping you are right
I can see them walking it down 50cents tomorrow and Wednesday. Even the analyst who are covering Appian have an average target price of $23 and change. Just imagine what the 5% owners got to see to get them paying upper 20s for their shares.
http://archive.fast-edgar.com//20180205/A422K22CZ222V2X2222F...2/1/18 Senior VP of Worldwide Sales converted 112,359 Class B shares for the same amount of Class A shares (options priced at .83 cents)http://archive.fast-edgar.com//20180206/AS25T22CZ222W2DK2226...2/6/18 JPMorgan Chase picked up 191,365 shares in another private placementThat is why my Schwab interest rate for borrowing my shares is sitting at 53% and not dropping as I thought. There are more mouths lined up at the trough waiting to dine on some Appian!! This resets the 5 day pricing window IMHO for this next deal, and so the downward pressure on the stock should remain. Seems like all these deep pockets are trying to get in BEFORE earnings on Feb 24. Think they know something?!?So today the stock rose with the market a handsome 4.9%. The closing price was $28.88, which is still below the 1st day closing price on the last deal ($28.97). The short effort just has to keep the price level for the next 4 days. I guess I’ll take their 53% interest for another 4 days!!!Let’s see how APPN looks tomorrow, but I am imagining that we’ll see lower prices for the next 4 days until their deal’s pricing closes. I’ll keep monitoring Free Edgar for SEC disclosures, and hope these private placements conclude so the stock can run!
Hey Gianni. I haven't been on the board lately (day job getting in the way..haha!). Anyway, I was catching up on your recent posts and also saw the SEC filings for JP Morgan and most recently Vanguard. Also, of interest, I was trolling Appian's website to see if anything new unusual might hint at forthcoming news or developments. In my wondering around I happened to start checking out their Board of Directors and one of them (Prashanth Bocassam)is a Partner at Novak Biddle. So, yea, I think your supposition that someone(s) has insight on forthcoming reporting, news and/or developments is spot on. I've held my position but am actually thinking of buying some more this week if price stays pushed down. As always, thanks for your persistent intel and insights re APPN. Best - Jim
Nice find with the BOD and partner at Novak, Biddle. Any idea when Prashanth Bocassam was added to the Board?I bought more recently at 27.50, but my average price is still $32.50 and the stock loan interest rate is still 49%. I cannot see that short staying open through earnings on Feb 22. Way too much risk!!
Stock loan rate went from 49% to 47%. Again, I cannot imagine the big short position being maintained through earnings so that gives them another 6 trading sessions to accumulate shares and unwind the short. Also, http://archive.fast-edgar.com//20180214/AV22L222Z222N9Z2222D...Lord, Abbett is now a 6.63% owner of Appian as of December 31 (they likely have 45 days to file but decided to wait for literally the last day. Were they trying to hide the fact that they have such an interest in Appian?!?The founder/CEO had some kind of transaction that converted his Class B shares into Class A shares but I couldn't be sure from the filing (in case someone who knows can chime in). http://archive.fast-edgar.com//20180213/ATZ8E22C3222W2M2222K...This also was filed on the last day I believe.
Rate dropped from 47 to 46% this morning. FYI
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