In my opinion, this is the only logical explanation for the heavy morning trading in AIPN stock for the last 7 days.
Since last Thursday we have all been watching the incredible volume of trades with varying degrees of amazement. I have been tracking the trades very closely since last week and what I and others have noticed is that the really heavy buying occurs in the morning starting right at the open. Often, it has been frenzied buying as was the case yesterday, for example. On some days more than half the day's total volume was traded before noon. Another thing I have noticed is that trading has usually slowed down around 12:00 or 1:00. Using yesterday as an example, AIPN traded a total of 2,385,000 shares but my guess is that no more than 500,000 shares traded between 1:00 and 4:00 PM. In fact, I was on the phone with someone yesterday afternoon for about a half an hour and we both remarked that only about 20,000 shares had traded during our conversation.
So, what might be the point? Well, there has been a lot of speculation as to the identity of the accumulator. Some have suggested it might be an oil company. Others have suggested that it might be a lot of investors anticipating news. My suggestion is, and always has been, that a foreign investment group rumoured to be based in Abu Dhabi is accumulating up to $20 million AIPN shares. This rumor was started awhile back by two posters to this or the SI thread. The first rumor was that a foreign investment firm was looking at AIPN. The second was that the Abu Dhabi group was looking to buy $20 million worth of shares. Both posts were by individuals who had never posted before and have never, to my knowledge, posted since. Normally, that would render the information suspect. However, I later learned by accident that Prudential-London and the Abu Dhabi Overseas Investment Company had both expressed an interest in AIPN and that the latter company was headed by a friend of George Faris'. Those two bits of information gave the mystery posters information more credibility in my mind.
Now, getting back to the volume, I think that the pattern that I described above strongly suggests that the accumulation is occurring from overseas. Let's assume that the buyer is in Abu Dhabi which has an 8 hour time difference with New York. At 9:30 AM EST it is 5:30 PM in Abu Dhabi...At Noon in New York it is 8:00 PM in Abu Dhabi. A firm over there trying to buy a substantial amount of stock in an American company in increments would manage that investment (perhaps through a London-based brokerage firm such as Prudential) starting at 5:30 PM. By 8:00 PM Abu Dhabi time, I think it would be reasonable to assume that the daily quota of purchases had been achieved and the investment managers at the firm were free to go home. As a direct result, volume dries up after noon NY time.
One could argue that the investor need not be following every purchase personally. He/it could simply give instructions to a brokerage firm to continue buying after the firm closed down for the day. My experience, however limited, with Middle East investment firms is that they like to be directly involved in the buying/selling of stock. Through computers they keep track of every trade that involves their money. They know when a stock that they own gaps down sometimes before their US broker does. So, we are talking about people who are used to a "hands-on" approach to managing their investments. They are also people who start getting hungry around 8:00 PM and like to be with their families like everyone else. Since buying $20 million of AIPN stock is being done in increments there is no need to stay in the office beyond 8:00 PM. Result: volume dries up after 1:00 PM in the US.
I am convinced that the buyer, the "accumulator" if you like, is overseas and I'd put money on the location being the Middle East.
Cheers...Faris
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