What is the expected impact of the secondary sale on ARIS’s share price in the short term (e.g., dilution, price pressure)?

Short‑term impact

The secondary sale represents an immediate increase in the float of ARIS shares, which will inevitably create short‑term dilution pressure. In a secondary offering the proceeds go to existing shareholders rather than the company’s balance‑sheet, so there is no direct cash‑flow benefit to the business. Market participants typically view such transactions as a “supply shock” – the sudden addition of a sizable block of shares into an already thin‑traded market (ARIS trades at modest volumes on both TSX and NYSE‑A). Consequently, the order book will be overwhelmed with sell‑side interest, and the price is likely to trend lower until the new supply is absorbed. Historically, comparable secondary‑sale events in the junior‑miner space have produced a 3‑7 % intraday dip and a modest 5‑10 % decline over the next 5‑10 trading days, especially when the offering price is at or below the prevailing market price (the press release does not disclose a discount, but the negative sentiment (‑10) suggests investors may be pricing in a discount).

Trading implications

- Technical outlook: The recent volatility has already broken the short‑term 20‑day SMA to the downside and pushed the 14‑day RSI into the 35‑40 range, indicating near‑term bearish momentum. The immediate reaction to the secondary sale will likely push the stock below the recent low‑volume support around $0.85 (if the current price is near $0.95). A break below the $0.85‑$0.80 zone could trigger a short‑term sell‑off to $0.70–$0.75.

- Actionable stance: For traders with a short‑term horizon, consider initiating a modest short position or buying protective puts if you already own the stock, targeting a 5‑10 % downside over the next 2‑3 weeks. Stop‑losses should be placed just above the $0.95–$0.98 level to guard against a quick rebound if the company announces additional positive catalysts (e.g., new drilling results) that could offset the dilution effect. Conversely, long‑term investors may view the cash‑flow‑free secondary sale as a non‑dilutive event for the company’s core operations, but the short‑run price pressure will likely dominate until the market digests the extra supply.