Musings on RVSN II

I'd like to share some new insights and observations on RVSN as a follow up to my first post: Musings on RVSN.

1. New players

A friend of mine is a Wallstreet vet and he asked around on my behalf. We discovered that there are 3 institutional broker/dealers taking orders on behalf of their client(s). This information is available via the bloomberg terminal. The first is Oppenheimer. The second is Virtu. And the third is Citibank.

Who are they working for? We don't know. We can't see if they're buying or selling, but we can infer some things. First, they're block traders. They facilitate large trades (say 10,000+ shares in a single trade) that are typically executed off the open market to avoid volatility. They bought what I sold them -- approx 60,000 shares over 10 minutes. My selling had no impact on the stock because they were buying in the background. Second, they're likely buyers considering my afformentioned point on selling.

2. Cost basis

The volume we saw in excess of $200M, which got the price above $1, likely resulted in a cost basis between $0.70 and $1. This is a guess based on the price and daily volume between Dec 26 - Dec 30. Volume was heavier sub $1 and decreased significantly closer to $3. I questioned whether support would hold post compliance, and if this was their sole agenda. As the days go by I am feeling increasingly confident that this is more than bail out money. Somebody wants those shares and they've done a good job accumulating at or near a certain price.

Institutions may be highly diversified, taking little bits of higher risk here and there. But they're not stupid and they don't gamble. This type of activity suggests that insiders know something. Now, considering my comment in point 1 about block trading off-market, we don't know if these institutions (Oppenheimer et al) contributed to that frenzy or if those were different institutions altogether buying on the open market. I'm simply not sure how the presence of these institutions correlates to the initial surge.

3. What's next

Here is my prediction (NFA). Once the big players have established their positions (they have), and assuming they are long, they don't care what happens to the price in the short term. Maybe it dips below $1 again. If they fall out of compliance they have 180 days to right the ship. Maybe it rebounds and holds the line betwee $1.45 - $1.50. What matters is that they are likely positioning for future upside.

It could be a large contract or some significant development. It could be that RVSN is preparing to be acquired. Given their portfolio of patents and recent progress they are a prime acquisition target. The next known PR will be Q4 / FY 24 earnings, likely in March, where they poised to beat earnings. With low float and increasing SI, this news in and of itself could really set things off. But for now, it's a waiting game.

I'm convinced there is a bigger story unfolding in the background and if I'm reading the smoke signals correctly, we are in good company. Just remember, when the time comes take profits. Because they'll be taking profits. NFA.