I think as Jeffery Mitchell said, you really don't get around much.....what is happening with the price of AZNT, happens everyday in the market. Wireless Wonk has given you the explanation of what takes place time and again in the penny market.
>>Why is all I am seeking?<<
To: +KCsunshine (1988 )
From: +wireless_wonk Thursday, Aug 27 1998 12:14AM ET
Reply # of 2048
KCsunshine:
Let all those who can offer an explanation of how a stock went up 400% with such low volume happened?
How about this as a theory -- just a theory mind you.
Assume insider's control the vast amount of shares of a company. Assume also that most of those insider shares are unrestricted. At some time in the past, preferably at the market peak, insiders start selling short small amounts of shares into the float. Since the short is "covered" they have no problem with margin requirements. When the stock begins to bottom, they start to cover. This takes time to do without seriously impacting the share price. Once the large portion of the short is covered, a pump campaign is started, the remaining short position being covered with market orders. Those market orders, in combination with the pump, drive the stock price significantly up -- for a few days. As the pump begins to lose steam, the covered shorting begins all over again. The net result is that those holding shares have the same profit -- except for commissions -- that they would have had if they had sold the same amount of shares at the peak and they still own the shares.
Again, just a theory.
ww |
