Market Overview

SAExploration Soars Following Morgan Stanley Investment

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SAExploration Soars Following Morgan Stanley Investment

SAExploration Holdings Inc (NASDAQ: SAEX) is the latest example of the powerful market combination of a low float and high trading volume.

Shares were trading higher by another 35 percent Friday after Morgan Stanley (NYSE: MS) revealed in a 13G filing Thursday it has raised its stake in SAExploration by more than 350 percent. The bullish news led to a huge spike in trading volume for low-float SAExploration and a major move in the stock on Friday.

Morgan Stanley’s latest filing suggests the bank is confident in the outlook for the Alaskan seismic exploration company. Morgan Stanley now holds 309,000 shares of SAExploration, a 9 percent ownership stake in the company.

Why It's Important

A vote of confidence from a major Wall Street investment bank is always good news, and Morgan Stanley’s investment brought a lot of attention and trading volume to SAExploration Friday.

According to Yahoo Finance, SAExploration has only a 2.07 million-share float, which is extremely low for a stock making Wall Street headlines. A huge jump in trading volume Friday explains the extreme volatility. As of 11:58 a.m. EST Friday, SAExploration’s daily trading volume was already 11.1 million shares compared to its long-term average daily trading volume of just 734,000 shares.

What’s Next

Traders will be watching closely to see if SAExploration gives back some of this week’s float-driven gains after the Morgan Stanley spotlight fades. Of course, if Morgan Stanley continues building its position, the stock could be headed even higher.

The Bureau of Land Management website shows the status of SAExploration’s Alaskan seismic survey permit has been changed from “prepared and planning” to “paused” on Friday. The market seemingly ignored the status change in the wake of the Morgan Stanley news, but traders will also be watching for an update on the Alaskan permit situation and what it could mean for the company.

The stock traded at $5.26 per share at time of publication.

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Posted-In: Alaska Low Float Morgan StanleyNews Movers Trading Ideas Best of Benzinga

 

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