[ What's Wrong with This Picture? ]
I'm wondering about JP Morgan's Buy recommendation on 9/23. It will be difficult to determine their real motivation, now that trading in ASTM reflects the news of 9/24.
WHAT NORMALLY HAPPENS:
Analyst Craig Parker at J.P. Morgan Securities discovers ASTM trading at $4 x $4 3/8, and believes it will be at $12 in a year. He passes this information to Morgan's proprietary traders who buy a million shares driving ASTM to the mid 8s. Next, the information gets passed to Morgan's customers, who buy another million shares and drive the price to 10. Finally, the information gets passed on to the public. Proprietary research is always handled with these priorities.
But this didn't happen. There was no active buying of ASTM before Morgan released their $12 target to the public. If the normal scenario does not apply, then what really happended?
DO YOU BELIEVE THIS SCENARIO?
Analyst Craig Parker at J.P. Morgan Securities discovers ASTM trading at $4 x $4 3/8, and believes it will be at $12 in a year. He passes this information to Morgan's proprietary traders who respond, "We could triple our money on this one, but we have plenty of money and don't want any more. Pass it on to our clients." Morgan's clients say, "We're already rich. We could triple our money but we don't want any more money. Pass it on to the general public".
HOW ABOUT THIS SCENARIO?
Either Morgan or their clients are stuck with a huge block of ASTM with an average cost in the mid $7s. They have a 50% loss and have no chance of unloading the shares given an average daily volume of 35k. What to do? Is there any chance to sell out and break even? Someone figures, "Maybe if we tell the general public that they can triple their money on ASTM, we can sell at 8".
ANY OTHER POSSIBLE EXPLANATIONS?
I am intrigued by this mystery. Normally, heavy accumulation precedes the public release of such a positive buy recommendation. It didn't happen. Why not? If they really believed the $12 goal, why didn't they act on it? Any guesses? If Morgan is dumping, it will be impossible to tell, due to the news related volume. Personally, I put my money on the second scenario and sold at 9 5/8. I had a limit order in at the open, and was quite unhappy to have missed it. When I later got an unexpected fill, I was beaming!
Good Luck to all, and please help me solve the mystery! |
