Ambrilia Biopharma Inc. (TSE:AMB) (PINK:AMBFF) corrected back down losing nearly 60% of value today, when the preceding short price rally failed.
The explosive price action came with no corporate updates and the company even published an announcement on Monday, stating the management is unaware of the reasons behind increased trading.
This situation points to short squeeze as one of the possible answers to what happened. The stock was slightly trending down over the past year, however, it hardly seemed enough to look attractive for shorting. The stock had been stuck in price channels most of the time.[BANNER]
Share price should be expected to return back to the $0.02-$0.04 range in a day or two as there are no reasons for it to stay higher. Of course the 4 cents level could act as a support from a technical side, but it has no fundamental backbone to behave like that.
The end of the month will likely bring even more confusion among stockholders. Ambrilia is undergoing a restructuring process and has until January 28, 2011, to file a plan of arrangement for consideration by its creditors. The date was set in the sixth extension of the Companies’ Creditors Arrangement Act (CCAA) stay order. Ambrilia’s management has been struggling to get the company back on its feet since the initial court order was issued on July 31, 2009.
