How will the NCIB affect Knight Therapeutics' share liquidity and price volatility over the next 12 months?

The NCIB gives Knight Therapeutics the right to retire up to 3 million shares – roughly 3 % of the current 99.7 million‑share float – over the next 12 months. Because the programme is capped at a daily maximum of 15,823 shares (≈ 25 % of the six‑month average daily volume of 63,293 shares), the buy‑back will be absorbed gradually rather than in a single, market‑moving swoop. In practice, each day the “cancellation” of shares will shave a modest slice off the tradable float, tightening supply and nudging the order‑book upward. The net effect is a modest but steady improvement in price support, especially as the remaining float becomes slightly more concentrated in the hands of long‑term holders.

From a liquidity standpoint, the daily cap means that day‑to‑day trading activity will still be able to absorb normal market flow; the bid‑ask spread is likely to stay tight and the market‑depth will not be dramatically thinned. However, as the cumulative buy‑back progresses, the reduced float will amplify the impact of any large, discretionary trades, leading to a modest rise in price volatility in the latter half of the program – a classic “float‑squeeze” effect. Traders can therefore expect a generally bullish bias with a smoother price trajectory in the early months, followed by a potential uptick in swing‑size moves as the remaining free‑float shrinks.

Actionable take‑aways

- Short‑term: Look for buying opportunities on pull‑backs to the recent support zone (around CAD 0.90‑0.92) as the NCIB provides a floor‑price cushion.

- Mid‑term (6‑12 months): Anticipate a gradual price premium of 3‑5 % over the current level, with widening intraday ranges once the cumulative buy‑back exceeds ~1.5 % of float. Position via a modest long bias or use tight‑stop‑loss longs to capture the upside while limiting exposure to the emerging volatility.

- Risk management: Monitor daily volume; if daily turnover spikes above the 25 % cap, the NCIB may be forced to pause, which can temporarily relieve upward pressure and create short‑term technical reversals. Keep a watch on the bid‑ask spread and any sudden spikes in the order‑book depth as early signals of liquidity strain.