SAExploration Holdings Inc (NASDAQ: SAEX) is having a strong day in the market today. The stock has gained well over three quarters of its value in a single session, but no news has been released. Nonetheless, there is a cause for the movement. There’s also a cause for concern. Today, we’ll talk about:
- Why SAEX is headed up;
- what investors should be very careful with this stock;
- what we’re seeing in the market; and
- what we’ll be watching for ahead.
Why SAEX Is Headed Up
As mentioned above, SAExploration is having a great day in the market today with gains well over 75% of its value. What we haven’t seen however is a press release. Nonetheless, there’s an SEC filing that is surfacing around the social space that seems to be the reason for the gains.
According to the filing, Brian A. Beatty, COO at SAEX purchased 3,050 shares of the company’s common stock at an average price of $2.0819. In general, when insiders make a purchase, it shows that they have confidence that the value of the company they are part of will climb. So, it seems as though investors are happy with this insider move, which pushed the stock up. From there, traders saw gains on a low float and decided to push it further.
Be Very Careful Here
While SAEX is generating incredible gains today, this is a stock that you should be very careful with if you want to get involved. First off, look at the incredibly small market cap on the stock. The smaller the cap, the bigger the risk is a general rule of thumb that many follow. Moreover, there’s bad news coming that’s hidden in another SEC filing.
In December, SAExploration filed an S-3 with the SEC. This form outlined an incredibly dilutive transaction. However, most of that dilution hasn’t occurred just yet. According to the filing, there are about 18.83 million shares that are issuable under the transaction that have not yet been issued. When the holder of these warrants and notes decides to convert this debt into shares, current shareholders of SAEX will be left holding the bag.
What We’re Seeing From The Stock
While there are big risks with regard to SAExploration, the gains today are hard to ignore. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (11:39), SAEX is trading at $3.97 per share after a gain of $1.78 per share or 81.27% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on SAEX. In particular, we’re interested in following the stock to see just how high traders push this thing before it starts to tumble back down. We’re also interested in following the shares that are yet to be issued under the recently-filed S-3 and how far down they send the stock when the debt is converted to shares. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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