Art, Imagine shorting a stock at $7 and having your brokerage buy you in at $54! Suddenly your $25,000 short-sell becomes a $200,000 loss. Now imagine going in with $100K or so, in a margin account and having an $800,000 loss, when the brokerage takes you out at $54. This is what has reportedly happened with ADSP. . . .and to be sure. . .this type of brokerage abuse will certainly be looked into by the SEC.
As much as we have beared those wishing to manipulate the price up or down by their actions and words, we can never wish for anyone to bear such a loss. And this is why the shorting that we do here on the HOME thread is usually that of the QQQ or Spiders or on stocks that are way way way overvalued compared to their sector, where the risks are minimal. . . . .shorting low float low priced stocks can be suicidal.. . especially where sector leader valuations are very high by comparison. . . as in the case of ADSP, suddenly seen as a wireless and a Linux play [whether or not it really is].
And with this market as bullish as it is getting [moreso than I have ever before seen], there will be many more ADSPs in the next 3 or 4 months. . . .we are probably holding several of them right now.
And ADSP's float wasn't even all that low. . . 7 million or so. . .imagine a momentum on a 200k, 400k or 600k float! These could go well into the hundreds . . . and as SIEB showed us, they can easily maintain a high valuation for months on end.
What I won't stand for, is unsubstantiated hype or spamming of low floaters for the sole purpose of manipulation. It should be sufficient to point out advantages. . . but we don't hype. . . which is why we don't tolerate bashing. . . both are "tactics" for manipulation.
We don't need to. . . .we make tremendous gains by obeying the law. And our goal is to be around in 5 to 10 years to enjoy our wealth, rather than spending 5 to 10 behind bars, as Pump & Dumpers and Bash & Cashers will one day find themselves. . . and deservedly so.
Rande Is |
