What happened

Shares of Nano-X Imaging (NNOX 4.88%), or simply Nanox, plummeted early on Tuesday morning. That's because the company filed with the Securities and Exchange Commission (SEC) late yesterday afternoon, telling shareholders that some insiders are cashing out. At one point, Nanox stock was down almost 9%. 

However, some eagle-eyed investors spotted some new information buried in the SEC filing that they believe is very good news for Nanox's business. As a result, its stock was up 13% as of 3:15 p.m. EST.

So what

First, let's address the stock offering. According to Nanox, it's not getting any of the proceeds from the sale. Rather, the proceeds go entirely to the selling stakeholders. Therefore, this is a nondilutive stock offering, which is good. However, it never feels good when early investors want to take profits now.

An investor studies information displayed on projected bar graphs, charts, and arrows.

Image source: Getty Images.

If the stock offering was the only thing in the SEC filing, Nanox stock likely would have stayed down today. However, some investors noticed that deeper in the filing it said, "the Review Organization subsequently recommended to the FDA for clearance on December 28, 2020."

For context, Nanox stock fell earlier this month when management informed investors that the Food and Drug Administration (FDA) had asked for more information about the company's medical imaging technology. Many investors took this as a bad sign. After all, the entire investing thesis for Nanox stock assumes the company is able to gain FDA approval. But with the FDA asking questions, investors started getting nervous.

However, today's SEC filing contained much more hopeful information -- that clearance had already been recommended. Therefore, FDA approval perhaps isn't so far off after all. That's why this stock rebounded sharply today.

Now what

Nanox's move today can be seen as a microcosm for the stock as a long-term investment. There's great long-term potential for its proprietary imaging technology and unique business model. But if FDA approval never comes, this prerevenue company might never create shareholder value. With so much still riding on hope, this growth stock will likely remain volatile for years as Nanox tries to execute its plan.