Further to the example I gave of UBS on vancouver....the company put out a release finally explaining the situation:
Private placement
Unique Broadband Systems
Mr. Alex Dolgonos reports The company has secured a commitment for the private placement of 4 million units at 20 cents. Each unit consists of one share and a half warrant. Each whole warrant will entitle the holder to purchase an additional share for two years at 20 cents in the first year and 25 cents in the second year.The proceeds will be used for working capital and general corporate purposes.A commission will be paid to Canaccord Capital Corp. which acted as agent in this transaction.
Now its obviously good for the company that someone is believing strongly in them and is willing to step up with a big cash infusion. The catch though, was that to get the infusion, the share price had to be dropped to a level that the purchaser of all those shares was willing to pay.....a "you scratch my back I'll scratch yours" scenario.
I was thinking more about this last night. Its too bad (now this is a pipe dream) that legit investors couldn't be forewarned that this downward manipulation of the price was going to happen....that in the big picture this was a very positive thing for the company. Imagine a release that said "the company is going to TEMPORARILY drop the price to position a big investor who strongly believes in us." Hahahaha, now of course that would never happen, but it would certainly be more fair and honest to all concerned. Undoubtedly there were many investors shook out who saw the share price declining and thought the company was going all to hell when quite the opposite was/is in the works.
Now, for those of us with either greater insight, or greater capacity to see what is/was happening through Stockwatch (or whatever other service), it provides a very a very interesting and potentially lucrative way to make some good money over a short term period of a couple of days or a week or two.
I guess what I'm saying is this. Although I trade for a living and love these opportunities when they present themselves, I do have a "tug" for the legit investors who got shook out in the process. They might not have the computer access or the time to get a grip on what was happening...they just thought they were buying a good company. (and they were). More and more, I see that the market is not a "fair" place....it never was. The closest we can get to "fair" is to fully know and understand all the games that get played and take advantage of them as they arise.
Ok, enough bleeding-heart stuff. :)
See the game, know what its about, step up to the plate, make the $$$'s.
All the best everyone!
Kevin
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