What impact will the increased float have on the stock's liquidity and bid‑ask spread?

The secondary‑market float will rise sharply once the $75 million offering (plus the 30‑day under‑writer option for another $11.25 million) is priced and sold. By adding roughly 86 %‑100 % more shares to the tradable pool, the daily‑average volume that can be absorbed without moving the price expands, so liquidity improves. Higher float means market participants – especially institutional and algorithmic traders – can execute larger blocks with less impact, which typically narrows the bid‑ask spread as more market‑makers are willing to post tighter quotes on a deeper order book.

However, the spread compression is not automatic. In the short‑run the new supply can overwhelm existing demand, prompting a temporary widening as dealers rebalance inventory and price the offering at a discount to the pre‑offering market. If the offering is priced at a meaningful discount (common in secondary offerings), the post‑offering price may settle lower, and the spread could stay wider until the market digests the dilution and establishes a new equilibrium. Technicals will likely show a breakout to the downside on the first few days, followed by a re‑establishment of a tighter range once the new float is fully absorbed.

Trading take‑aways

1. Pre‑offering: Anticipate modest upward pressure on the spread and a slight premium on the order book as investors position for the new issuance. Consider a short‑term buy‑the‑dip if you expect the discount to be modest and the market to re‑price quickly.

2. Post‑offering: Monitor the spread and depth on the Level 2 book. If the spread narrows and volume holds steady, you can add to long positions or use tighter‑priced limit orders. If the spread remains wide and volume is thin, stay on the sidelines or use tight stop‑losses until liquidity stabilises.

In short, the increased float should ultimately enhance liquidity and compress the bid‑ask spread, but the transition period may feature temporary spread widening and price volatility that traders should manage with careful order‑flow monitoring and disciplined risk controls.