EUTO READ THIS
The real story behind EUTO, in my opinion, is something that would make any penny
stock salesman proud. Based on my research, the real reason for this stock's run is
because of a group of investors (I mean promoters) that call themselves the "Cartel." As
of last count there are about sixty seven members of the "Cartel," and numerous "Cartel"
wannabes. Basically a group of people got together, chose this stock, bought a bunch of
the shares, and then started promoting the hell out of it on Internet Stock Message
Boards. Their theory, based on the information learned from a post written by the
number two member of the "Cartel," was to orchestrate a massive short squeeze.
According to the information provided by the "Cartel," EUTO had 49 million total shares
of which 18 million were held by the company. I have no idea as to the accuracy of this
information, but I have seen it mentioned by numerous individuals. That means the float,
if that information was true, is about 31 million shares.
The "Cartel" wrote that a high number of those shares were held by shorts, and they felt
that if upside momentum could be established then the shorts would be forced to
cover.pushing the stock price up even further. Then the "Cartel" would develop a
"Target Goal before any significant shares were sold off. And then, the shares should
only be sold off in small increments to help maintain the price." Clearly, everyone wins
and makes money and the shorts are punished for their bad deeds.
What was very interesting was the explosion of interest by other investors to get in on
this "Cartel." Numerous people jumped in and joined the "Cartel," creating further stock
appreciation. Each day more and more people started jumping on the bandwagon.
My theory is as follows.owning Eutro is like playing "hot potato." Whoever is holding
these shares when the music stops is going to get killed. I have no idea how much higher
this stock could rise, but it is my gut-feeling that most of the "cartel" is out. It seems too
perfect for me. A quick look at Bloomberg says the average trade size was 20,685 shares
today (8/8/97). That average indicates that many small investors were buying Eutro
shares. So what were the big investors doing? My analysis says they were selling in a
big way. Today, 1,598,000 shares in big blocks were traded resulting in downticks, while
only 339,000 shares in big blocks created upticks. It seems pretty clear the smart money
was getting out of this stock. In addition, over the past seven days over 60 million shares
were traded of Eutro. That is a lot of shares for a company that supposedly only has a
float of 31 million shares. Somebody has been selling to all of those buyers.
My guess is that this game of "hot potato" is real close to coming to an end. Although
the "cartel" promises an orderly exit from this stock, my guess (and if it were my money)
is that they are mostly out of this stock by now. How much further can it rise? I have no
idea, but my hunch is that the end is near. I think this proves what P.T. Barnum once
said: "A sucker is born every minute." |
