Jan<There were signs, indications; trend developments, hunchs, everywhere during the first weeks of June, Float/short interest/mass # of call options...why did'nt we see it...>
Good question but very hard to explain. Take my case. I shorted @40 and fled @50 but it was a hard call for me. I couldn't believe they took this stock up 10 points, when I thought it was the Titanic heading towards the ice-berg.
The reason I didn't want to buy to cover was because I knew that I wouldn't be able to get another 2000 shares to short.
Thats when I realized that the self orchestrated short squeeze was in play and I was just lucky to pick up the Seattle Times article on the Vinik stock accumulation. the rest is history.
Let me bring my post over from TMF and I'll continue
<Let's talk about Amzn's stock price and how it got there.
Yes, I can buy every bear, bull, and TMF's point of view.
What I scratch my head over is, how did these Internet stocks get such incredible valuations?
I have a theory on Amzn's claim to fame.
I believe a private fund manager, by the name of Jeff Vinik (manager of the private Vinik management fund, this fund requires a miniumum $2.5 million investment and will not release a prospectus to anyone, unless you meet their qualifications), decided about 3 months ago that Internet mania was in the making, and for the forseeable future, was bullet proof. He and some other institutions (MSDW,Merril etc decided that the timing was perfect and Amzn was chosen as the perfect stock, due to its thin float, soaring sales and Wall Streets lack of demand for profits.
So the deal was made, and the Amzn float was bought and controlled.
The short squeeze started causing all the retail shorts to 'surrender'. Wall Street calls it 'buy to cover'.
As the squeeze gets tighter, a phenomenon takes place as no shares become available to short (except Datek).
It is now a controller's paradise. They just sell to the highest bidder the stock, and buy back the stock that the little investor sells to take in a profit.
The contollers haven't seen such a money making scheme since ??.
They get the stock price up to 145 and now make tons of money as the stock price has wonderful fluctuations (yesterday low117 high 131).
How would you like to control a stock that you can sell @ 131 and buy back at 117? All in one day!
Next week should be even more profitable.
The controllers have no worry about the big sellers coming in as they are them.
How high they can bid it up to will only depend on how many little guys show up to buy this bullet proof
stock.
For a while the only way the little guy can make any money here is to be a little aggressive day trader.
Do we have any out there?
Those who control the float control the stock price.
Trust me.>
I'm back. This is why I'm doing nothing here except perhaps for a little day trading.
If you and a few other controllers had the float and had an agreement on when to sell, when would you sell (to understand my point, you must believe that only 2 weeks ago MSDW,Merril and Paine Webber where busted by the SEC for price fixing and agreed without admitting guilt to pay a $900mil fine).
This is when I'd sell and not before.
(a) If one broke the agreement.
(b) If Bezos tries to sell off another 5mil shares.
(c) If some news came out that some of these Internet plays won't make (not debate) it.
(d) If Wall Street really starts to get hammered.
(e) I just sucked this 'Thing' dry so I'm moving on.
Even then there's still big bucks to be made here .As I said before, how would you like to buy Amzn @ 117-120 and sell out of your inventory @ 129-13, to the retail yuppies? Remember their average cost is probably close to $35-40ps.
Can you imagine the money to be still made, with their price manipulation?
We will never know how much money Vinik and Co made here but RISK? The only risk they have is how many slivers of the pie they want to give back. |
