Mark,
Why do you ask these questions in a "public forum?":) Are you trying to humiliate me?:)
My disclaimer is that I am by no means an expert (more like a novice) and I believe the preferreds would be able to explain exactly how they operate and how the system works. If I knew I probably would be sitting on WS right now doing what they do for a living.
For one thing, I don't think there is a "squeeze" going on. It is my understanding that a true squeeze would make the price jump up prematurely. This has not happened since mid- October. The price, through my eyes, has been very controlled in the recent 7-8 week period. That is not a "squeeze" in my book.
MikeY touched on the subject by stating that it could be the professional shorters who may be at least partially responsible for the slow rise. So I guess there could be at least 3 answers: 1) It is only the preferreds 2) It is only the professional shorters or 3) a combination of the two parties. There is a possibility that the preferreds have let it be known to the professional shorters that they were willing to take the latest reset price and were ready to convert their shares once the SEC approved the registration.
Somebody moved the price down to maximize the number of shares the preferreds could obtain. IMO, the logical answer would be the preferreds and not necessarily the professional shorters (although the shorters could have unintentionally assisted the preferreds in obtaining the max number of shares). Remember there were no big institutions that owned GMGC stock that could pose a threat to the preferreds shorting the stock. The preferreds knew this IMO.
I strongly believe the preferreds controlled the downward price. What other explanation is there for the preferreds to have obtain virtually the exact number of shares that they were officially authorized to obtain from GMGC (ie the max number at the lowest possible price allowed by the various deals).
I guess the biggest question I have now is how can the preferreds control the upward movement if the shares they shorted were "against the box?" In other words they cover their shorts with the common stock they will obtain from GMGC. One possible answer is that they did not short against the box and they shorted on the open market. They will get approximately 25 million shares per the latest registration document yet there was only a maximum of I believe around 8 million shares as of Nov 15. So, they only had to short 8 million (or how ever many shares they shorted) to drive the price down to the mid $1 range and consequently obtain approximately 25 million shares. To avoid an uncontrollable upward spike, they could be slowly covering their shorts. If they didn't control the upward movement, then they would take a bath on their shares that were shorted. That is if they shorted on the open market.
I know I am doing a lousy job of trying to explain my reasoning, but it is one of those things in life. You know something has happened but you don't have the proof to back up your argument:) In this case I just don't know exactly how they are doing it. I have heard a thousand theories but without the specifics (or knowledge) I can only hypothesize. I think I know the end result but not the exact means to get there.
If you look at the 10/29 registration, they mentioned probably 10 different ways that the preferreds could basically manipulate the stock (thanks to the old CFO IMO). I do know that the preferreds could short and utilize options as a means to reset the price and also to sell their common shares once they have converted. I think that is one reason why there are about 70,000 options (open interest for Feb 5 calls and puts). This tells me that they have mathematically figured out a win win situation and it also is another indicator to me that they now want out of GMGC. One other interesting thought here. Why is there no options past February? Since options have traded on GMGC, I have never seen options traded only 2.5 months out. Somethin ain't right in my opinion. Why aren't there options being traded further out than Feb?
Sorry about the rambling in a incoherent manner. All I know is that I strongly believe that the converts (with no major institutions onboard) are still controlling this stock. At least through today. Tomorrow may be another story.
Take care,
Kurt |
