Yesterday, Emisphere Technologies, Inc. (OTC:EMIS) stock pulled back, correcting the enthusiastic share price increase during Wednesday’s session, when the stock alerts and the news about funds raising caused more than 1.8 million shares to change hands.
EMIS stock rose by 3% in the session, closing at $1.05 per share. Investors kept EMIS downward direction, resulting in almost 1% pull back from the previous day.
On Wednesday, the company announced that it expects to receive around $6.5 million net proceeds from a private placement.
Parallel to the funds raising news, the stock alerts got widely spread, trying to convince investors that EMIS is traded lower than the above mentioned news would suggest.
That resulted in furious bids and colossal volume traded. Finally, EMIS closed the session with the unexpected 19.70% price drop down from Tuesday, despite the 32% increase of the share price in the session.
Taking into consideration the announced a few days ago by EMIS mirthless financial results for the six months ended June 30, 2010, it was difficult to believe that investors were able to cause such a share price jump these days without the support of pushing stock alerts.
For the above mentioned period, the company reported a net loss of $32.2 million, or $0.75 per basic and diluted share, compared to a net loss of $9.6 million, or $0.32 per basic and diluted share or the six months ended last year.[BANNER]
In the report, the urgent need of cash for EMIS operations was also evident. At the end of June, the company had cash and restricted cash totaling $0.7 million, compared to $3.3 million at March 31, 2010.
Seems, that the expected $7 million from the private placement will not be able to ensure the company’s operations for a long time.
On the one side, the technical indicators and the price chart of EMIS suggest that on the short term the shares may go green, changing the downward direction. Though, based on the company’s financials and on the fact that EMIS stock is traded now at twice its 52-week low, the buyers’ pressure will not continue for a long time.
