Looks Like IGC's Selling Effort Is Being Conducted Through Pre-Arranged Stabilizing Transactions. . .

There will be no way to tell for a few months, definitively, whether or when the IGC sales began -- or were halted from time to time -- as SEC reports won't be triggered until certain percentage threshholds are breached (as IGC falls below 10 percent of outstandings, then again at 5 percent of outstandings) -- but the larger volume, and orderly trading of the last few days is suggestive of transactions that are either stabilized (supported by hedged positions), or pre-arranged, in blocks -- and only reported throught the NASDAQ-OTC system, after the fact.

All of this is perfectly appropriate, and specificly authorized under the prospectus that Mattersight filed (and paid for), on behlaf of IGC Fund VI, L.P., last month. See the definitive Rule 424(b)(3) prospectus, at page 6:

PLAN OF DISTRIBUTION

. . .[IGC Fund VI, L.P.,] and any of its pledgees, assignees and successors-in-interest may, from time to time in one or more transactions on the NASDAQ Global Market or any other organized market where our shares of common stock may be traded, sell any or all of its shares of our common stock through underwriters, dealers or agents, directly to one or more purchasers or through a combination of any such methods of sale. The selling stockholder may distribute the shares of our common stock from time to time in one or more transactions:

• at a fixed price or prices, which may be changed;
• at market prices prevailing at the time of sale;
• at prices related to such prevailing market prices; or
• at negotiated prices.

The selling stockholder may use any one or more of the following methods when selling shares:

• ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
• one or more block trades in which the broker-dealer will attempt to sell the shares as agent or principal of all of the shares held by the selling stockholder;
• purchases by a broker-dealer as principal and resale by such broker-dealer for its account;
• an exchange distribution in accordance with the rules of the applicable exchange;
• privately negotiated transactions;
• short sales;
• agreements between broker-dealers and the selling stockholder to sell a specified number of such shares at a stipulated price per share; and
• any other method permitted pursuant to applicable law.

If the selling stockholder effects such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholder or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling stockholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholder may also sell shares of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholder may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares. . . .

Even so, as the graphic at upper right makes plain, it will be several quarters before the overhang is cleared, in all likelihood.

UPDATE: Additional evidence for this theory is provided by the fact that "ordinary bid/ask" quotes on the NASDAQ show a spread of over a dollar: bidders to buy are willing to buy at $7.65, while sellers are willing to sell (the "ask") stands at $8.63 -- with 100 shares indicated on each. That means the normal NASDAQ OTC trading is all but frozen, as buyers and sellers (regular way) are over a dollar apart on the haggling gap. That is huge, on an $8 stock, that usually only trades 10,000 shares a day.

So it goes -- be careful out there.