A couple of weeks ago, we saw what appears to be a mistaken filing on the part of a shareholder of Meade. Today, we take a look at another strange filing from a large shareholder of the company.
Lance Laifer's Wapiti Capital is listed as the owner of 7.65% of Meade's shares on the company's latest proxy statement. Recently, Wapiti filed a document listing its ownership at only 4.6% of Meade's shares. That's not the strange part; I, too, thought Meade was undervalued at one time but recently changed my opinion as the company's balance sheet and operations have taken a turn for the worse.
What is odd is the manner in which Wapiti reduced its stake in Meade. It appears to have done so by both buying *and* selling, sometimes on the same day. For example, on November 6th, the company purchased 100 shares at $1.98, only to sell 500 shares at $1.90 on the same day! There are other examples; for every 2 selling transactions, there is almost 1 purchase transaction.
Clearly, however, the intent was to sell: the size of purchase transactions was much smaller than those of sale transactions, which is how Wapiti has reduced its stake in Meade so dramatically. Also, the company lost money on most of these purchases (i.e. it purchased stock on the same day for a higher price than it sold these same shares). The question I have is: why buy shares at all, especially at a loss, when the intent is to sell?
My best guess is that it's an attempt at fooling other investors into thinking there's interest in the stock, and then unloading shares into that interest. For example, if there aren't a lot of limit sell orders, someone looking to unload shares might buy up those sell orders to move the price up, and then sell his shares into the buyers who seek to profit from a rising stock. My understanding is that this constitutes market manipulation, but since I don't know that this was Wapiti's intent, I'm not in a position to conclude that this is what is happening here.
I sent a direct message to @LanceLaifer requesting comment, but have not heard back at the time of publication. I'll update this article if he provides any comment.
Do readers have any suggestions of what may be going on here?
Disclosure: No position