MGCN - explanation of todays 40% jump in price on huge volume:
A few hundred thousand shares of MGCN were bought last Thursday and Friday. Megachain was then extensively hyped on the Raging Bull and by email over the weekend by many first time RB accounts. The hype was easy, consisting in part of simply quoting and paraphrasing the accurate information that has been posted on this thread.
By 10 AM this morning, MGCN was up over 55%, and the dump & short cycle of the pump and dump began, with many other, also never before seen RB accounts badmouthing the accused pumpers, and spreading misinformation about MegaChain. The dump part was not very successful. The shorters were unable to get the price below 1 3/32 all day, and it closed up 40% at 1 3/16. The failure of the shorters to drive the stock back down is due to the fact that MGCN is a genuinely excellent prospect at these prices.
Expect the frustrated shorters to continue slamming the stock for awhile. Also expect new investors to discover MGCN as a result of its now stellar short term price & volume chart.
Tom Lavin and the other principals at Megachain are very disappointed that this pump and dump attempt occurred. They firmly believe, and have stated repeatedly, that the stock price will, and should, follow the business. They are convinced that the Megachain system will be successful and profitable, leading to a stock price that is many times higher than the current price. Short term pump and dumps do not contribute toward that goal.
Even if they wanted to, CEO Lavin and others can't even begin to sell their shares or redeem the first of their options and warrants until next year. This was done to focus everyone at Megachain on the long run goal of building a successful business, and to demonstrate this fact to investors, vendors, customers, agents, and clients. Temporary runups in share prices are useless to these insiders. The firm is financially structured so that they can only profit from sustained, long term rises in share prices.
Hype jobs may harm the company's image. MegaChain is especially disappointed about the spam emails that were sent to tout the company, since they violate the whole MegaChain concept of permission based, non-spam email advertising.
It is likely, though unconfirmed, that MegaChain will now DELAY their big news release by at least a few days and possibly longer, to avoid even the perception that they are in league with pumpers.
The advice for investors today is the same as it was 9 months ago at 50 cents per share, 6 months ago at $1.50 per share, and last week at 75 cents per share - Buy and hold. Over the next 6 months, MGCN should be worth far more.
signed,
Blue Voodoo |
