Research Blog

Penny Arcadia: Managing Expectations

How Wall Street Horizon data helps untangle the story of a 53% price jump

Arcadia (NASDAQ: RKDA) closed August 8, 2019 at $2.01 per share, recovering from a 14.4% decline to $1.87 on August 6th.

For reference, the company originally announced via press release at 4PM on August 5th that the next earnings date would be on August 7th. However, just 45 minutes later, now after market close, RKDA issued a second press release with a new earnings date to August 14th aftermarket.

Interestingly, this new earnings announcement date now coincides with their SEC filing deadline – right up against the wall of the regulatory requirement. Wall Street Horizon, Inc. alerted clients within 1 second of each change, while providing extensive access to original documents, such as the PR Newswire link.

No one anticipated the news which would break after the close on August 8th: that the company and its development partners had received USDA regulatory approval for a new drought-resistant variety of soybean.

On Friday August 9th, the stock opened with an initial stutter with the stock trading 17.5 thousand shares at $4.51 before leaping higher, gapping up to open the next hour at $5.95, and moving over the next two hours to a high of $7.34, a 296% gain from the low on the 6th, and closing on Monday, August 12th at $6.93. Volume in that first hour of the big move was 12.7 million shares!

So, what’s the story behind the story?

It may be that the management of RKDA, reeling from a 72% drop in the price of the stock from mid-June down to early August, would be a portent of even worse news on August 7th when they had originally scheduled their Q2 earnings. It was certainly a sign that investors were not confident in whatever might be forthcoming.

Figure 1

Figure 2

Figure 1 shows the measured moves. But Wall Street Horizon can add significantly more detail and further color to the chart as they track over 40 different event types, with an extensive history, and immediate links to source documents. Note that Wall Street Horizon tracked the RKDA shareholder meeting on June 3rd and as well as the secondary offering of 1.5M+ shares on July 26th (see figure 2). In the weeks and months following RKDA’s expected August 14th earnings release, Wall Street Horizon does not see RKDA personnel attending or presenting at any industry conferences, R&D or investor events, however, clients are notified of all changes on an ongoing basis.