When a major shareholder raises its stake in a company then it is generally seen as a positive by market participants. However, things did not work out in the same way for the GoviEx Uranium Inc (OTCMKTS:GVXXF) stock yesterday.
Market Action:
On Thursday, GVXXF stock moved down 6.61% at $0.3922 with more than 520.65K shares, compared to its average volume of 372.87K shares. The stock has moved within a range of $0.3800 – 0.4200 after opening the trade at $0.4052.
Existing Large Shareholder Increases Position in GoviEx in Transaction Worth up to CAD 41.6 Million
On Thursday, the company announced that Denison Mines Corp reached a private agreement by way of which it will sell as many as 3,2500,000 common shares out of the 65,144,021 common shares that it has under its ownership. The shares are going to be sold in exchange for C$0.48 each and warrants. In exchange, Denison will be able to pick up 32,500,000 shares in GoviEx for an exercise price of C$0.80 within a period of the coming 18 months.
While it is true that it was a complication transaction, it helped Denison in raising its stake in GoviEx the market reacted negatively to the news. After the announcement was made by the company, the GoviEx stock actually dived by as much as 7%. Although the decline in the stock may have been alarming, it should be remembered that in the past week, the stock is still up by as much as 12%. It remains to be seen if it can make a recovery and end the week strongly.
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