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Microcap & Penny Stocks : JAWS;A P/E of 2 with 150%/yr Erngs Growth!!
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To: Jim Johnson who wrote (1651)5/28/1998 7:12:00 AM
From: Wayne Rumball  Read Replies (1) of 4230
 
Thanks anyway, seems someone on another thread read my mind and posted this;

MM MANIPULATION ARTICLE: A MONTH END PHENOMENON:MUST
READ:

Here is a copy of an article sent by NASDAQ BB STOCK newsletter(Knowledge of
the month end games may help us not fall into MM traps):

The following is an excerpt from MM GAMES

The Famous "Month End Maneuver"

We receive dozens of emails from our readers asking the
question:
"Why do my OTC stocks all seem to get killed at the end of each
month, and quite often rally the first couple of weeks of the
following month?" Rather than individually responding to them,
and to help better educate the public we want to explain what
typically goes on at brokerage firms at the end of each month,
and why.

First of all definitions: MONTH END. Typically the day (either
settlement day or trading day depending on their system of
accounting) that a BD (Broker Dealer - registered as such with
the NASD) calculates their paper gains and losses for the purpose
of calculating that firms NET CAPITAL (disclosed financial position)for FOCUS
REPORTS (financial reports filed with the SEC). For
example:

ABC is short 100,000 shares of XYZ corp - a small, OTC stock
trading at $1.875 bid, $2.125 offer. Their month end is
"settlement day" - meaning trade day plus three (like when you
or I have to pay for the stock we buy) and the date is June 24,
1997 - (making settlement the last day of the month). In order to
enhance their balance sheets (which allows them to sell or buy
more stock against their net capital) they decide to start hitting
(selling) the stock. Here's the way it looks: They enter an order
to sell 10,000 shares at the market. The bid was only good for
2000 shares (not surprising since size buying or selling always
shrinks the offer or bid size) so the current market then
becomes: $1.75 - $2.125 ... until they offer stock at $1.875 - making it $1.75 -
$1.875... but not for long.. They enter an order to sell 8000 shares at $1.75 - which
was good for 5000 shares this
time. Now the market is: $1.625 - $1.875 .. until they offer down to $1.6875.. and it
continues: They see on level two (a trading
system that shows the depth of an OTC market) that there is two
bids at $1.625, but the next level is $1.3125. Ahha! A good
target price. They sell another 5000 shares at $1.625 - each market
maker buys 2500 shares and bid down - making the current price
$1.3125 - $1.6875... but low and behold: They offer stock at $1.375 -
making the price $1.3125 - $1.375.. The company is now short a total of 112,000
shares.. and in one day shows a paper profit of
$84,000 - which applies to their month end balance sheets! Do this on a couple of
stocks each month and a small BD can end up with
several hundred thousand dollars in additional buying power. The only problem is that it
is that you and I are the ones who get
creamed. I know of one savvy investor who buys the hell out of his small stocks at the
end of each month - and is usually able to sell
them at a profit the first few days of the month when the same market maker stops
LEANING ON (doing the above outlined
shenanigans) the stock. So at the end of each trading month, don't panic and assume
something is wrong with your small stocks! You are probably witnessing the "MONTH
END MANEUVER"

Excerpt from MM GAMES
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