Since yesterday a lot of investors are discussing the issue of the unusual activity of Nile Therapeutics, Inc. (PINK:NLTX) stock. At the end of the trading day, NLTX added to its value 22% on no recent company's news.
Only the enormous trading volume of 592K shares suggested that there is nothing unusual in the stock performance. The four times quarterly average for the company shares' turnover was rather a confirmation, that NLTX is already acquainted with the new OTCQB Marketplace.
In the beginning of this month, Nile Therapeutics, Inc. received a notice from Nasdaq informing that the company's common stock will be delisted from the Nasdaq Capital Market. The main reason for this was the non-compliance with the Nasdaq rule, which requires the common stock of listed companies to maintain a minimum closing bid price of $1.00.
As an usual practice, much more earlier, in January, the company presented a plan to regain compliance with the minimum closing bid price requirement, which was presented to a Nasdaq Listing Qualifications Panel (NLQP). Since this happened in January, the panel granted the company to regain compliance with the rule until May 31, 2011.
One of planed by NLTX measures presented to the panel in those days was to effect a reverse stock split. On May 10, 2011, the company informed Nasdaq that it had determined not to proceed with a reverse stock split prior to May 31, 2011. As a result, NLQP determined to delist the company’s common stock. Effective May 12, 2011, the company’s common stock has transitioned to the OTCQB Marketplace.
Few days after the transition of NLTX on the “new” market, the company disclosed its unaudited financial statements which for the divers type of investor sounded diversely- good or bad.
Nile Therapeutics, Inc.
The positive information presented in the above report was related to the company's potential to maintain operations at least in a short term. NLTX showed cash and cash equivalents of more than $2.1 million, and current liabilities of only $744 thousand.
Looks, the bully short term prospective of Nile Therapeutics, Inc. inspired more investors that had short plans towards company's stock. On the background of all recent company's developments and absence of updates, the “new” for the company's stock market caused of the duel with shorters. During yesterday's trading session, the short volume had 48% share in the total volume traded.
At present, as a spicy additive, the unusual activity of NLTX is perpetuated in stock alerts, which undoubtedly portends a furious trading session today.