Wogen, Gone


18 November 2018

The notification on the 12th of November that the remaining 3.60M Warrants held by Wogen were being exercised now means that there are no warrants left.

The previous article describing the pre-selling of the Atlas warrants explained how delayed reports of trades had appeared to mask the fact that the Market Makers short position of c. 4-5M shares had been systematically reduced ahead of the 6th Nov Atlas warrants announcement. 

This is shown in the graph above - the dotted line shows the estimated Marker Makers trading position if the delayed trade reports had not been included (because at the end of each day these were still hidden from us), whilst the solid orange line shows what was believed to be the true MMs trading position when these trades were correctly taken into account - a short position of c. 4-5M was clearly being closed.

The question we might now be asking ourselves is 'do we see the same behaviour around the time of the Wogen Warrants exercise ?'  - the answer is yes.

Between the 6th and the 12th November there were no equivalent delayed trade reports - however these restarted on the 13th November and currently include the following trades:-

The effects of these additional trades on the accumulated Market Makers trading position is shown by the cyan line in the chart above - again we see a short position appearing to be closed with the use of, it seems highly likely, the Wogen warranted shares. It will be very interesting if on Monday we see another significant trade appearing delayed from last Friday.

The news regarding both the Atlas and Wogen warrants has been intercut by TR-1 holding announcements relating to a shareholder called 'Golden Summit'. First, we had the announcement on the 2nd November that Golden Summit had gone above 4% holding on the 19th of October. Then on the 16th November we were informed that Golden summit had increased its holding to 4.89% on the 9th November.

This corresponds to an increase in shareholding by 0.89% - approximately 10M shares between the 19th October and the 9th of November. It is interesting to observe that this is very close to the total of all the Atlas Warrants (6.3M) and the Wogen Warrants (3.6M) added together.

The 9th of November was a Friday, the 12th was the following Monday - thus it may not be entirely out of the question that Golden Summit bought these shares in the market (on the 9th) before the Market Makers realised (on the 12th) that they needed to fall back on the Wogen warrants to provide the shares that had been bought by Golden Summit (and everyone else).

One thing seems rather puzzling - what is the reason for the second TR-1 ? - there seems no necessary reason to report the increase in holding as it has not yet passed the 4%->5% threshold. The reason, I think, is that the first TR-1 reported a 4.03% (44,692,700) holding on the 19th October - by the time that the 12th of November came around this had fallen back below the 4% threshold due to the dilution of both the Atlas and Wogen Warrants. This would have required Golden Summit to have to issue a TR-1 even if they had not bought a single further share - however it turns out that when you look at number of shares quoted in the second TR-1 (54,692,700) it transpires that they had bought exactly 10 Million more shares.

The recent very large trade  - 15 Million on the 30th October occurred after the first Golden Summit threshold crossing on the 19th October. However these TR-1's indicate that Golden Summit only increased their stake by 10 Million after that date and before the 9th November.

It seems the 15 Million trade would appear to be unrelated to Golden Summit's buying spree - had it been them we would have also expected a TR-1 relating to a 4%-5% threshold crossing around the 30th October.

All of this means is that there is now another possibility that we must seriously consider - that there might now be two large buyers both trying to build significant stakes in BMN.


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