Thanks for your response. I appreciate the opportunity to discuss this on technical and non-technical terms. A few responses:
There's really not a whole lot to discuss. You're long and your mind is made up. I have no position and don't plan on taking one. In six months we'll know the truth.
And the notion that Rose Glen will engage in such manipulations to the potential detriment (indeed, possible ruination) of its own investment, and at the risk of getting caught, sued and its reputation destroyed, is in my view more than convoluted - ridiculous is the adjective I would use.
If fear of getting caught would eliminate fraud and boarderline legal acts, then why do I read about telemarketers fleecing little old ladies all the time? Why do we need people in your field of work (JD)?
2. I do not think shorting per se affects the price of a stock, because borrowing shares on margin does not increase "supply"
Let's say that 10,000 shares of a stock exists and is owned by the public. I borrow 1,000 and sell it to someone else. The public now owns 11,000 shares. That 1,000 shares is actually owned twice is immaterial except in terms of voting those shares. For instance, if the stock pays a dividend all 11,000 shares pay the dividend. I say that the supply increased.
3. That anybody would base a decision on whether to invest in a company on the "hostility" meter of an internet thread is pretty scary.
Well, tell that to Greenberg (mailto:herg@thestreet.com). Ask him about the hostility of the Iridiots, the Stewpids, the IDT-iots:
"Iridiot" is slang for Iridium (IRID:Nasdaq) investors whose hostility sent this column's Hostile React-O-Meter careening when I first questioned back in May whether the news on Iridium was about to go from bad to worse. Iridium initially slid into the mid-single digits before bouncing back three weeks ago into the midteens. The stock's rise caused Iridiots to come out of the woodwork, including one who asked: "Are you ready to eat your last negative words about Iridium??? Have you seen what it's doing lately? Looks pretty green to me in them thar hills, stars, whatever!!" (That prompted the headline: "Iridium's Stock Is Back, and So Are the Iridiots.")
And, better yet, from that same issue of his column:
Calling all cults: After reading this column's back-and-forth with IDT investors, California clinical psychologist Jerome Silverman wrote that he believes it's clear the IDT-iots "reflect an additional classic behavioral principle. This has to do with external support for one's pathological condition. If an individual with pathological ideation is surrounded by people who challenge the pathological position there will be a reasonable probability that the position will be re-evaluated, rejected and a healthier one put in place.
"However if the pathological position has external supports -- people who similarly hold that position -- there is often very little chance to have that position re-evaluated, let alone having it modified in a healthier way.
"This is why cults are so powerful an influence on their members. It seems that for many buying a stock is similar to joining a cult. Instead of being investors -- open, alert, considering all information concerning their holding -- they become cultists, cheering the stock in spite of negative data and wanting to kill the messenger who brought it.
"They find cult mates on Internet message boards and in a kind of ritualistic behavior, post wishful predictions like 'up 10% by next month' or 'big takeover coming.' These posts have nothing to do with fact, but by posting them the action itself serves to reassure them and other cultists that all is well and that they have done something in the service of the cult -- e.g. the post and prediction.
"This is similar to primitive peoples who during a drought do a rain dance. It gives them something to do to validate their beliefs and it reaffirms the cultist hope."
Which is where the "springs eternal" comes in. |
