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Gold/Mining/Energy : Day trading in Canada
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To: Wizzer who wrote (808)10/10/1998 7:10:00 PM
From: keith massey  Read Replies (1) of 4467
 
Another couple other points about private placements for people not familiar with them.

I agree with Wizzers statement that a lot of stocks go down soon after the private placement is completed. I have always thought that a lot of companies promote up the price of their stock to get the best price for the P.P. When the P.P is complete the promotion ends and the stock drops - plain and simple.

1. Most private placements have a hold period of at least one year. People taking down a private placement today cannot sell their stock for at least one year. When researching a stock I go back one or two years and find out who has taken down private placements, at what price and when those shares become free trading. If the people taking down the private placements have had a history of stock promotion then I wait for signs that a promotion is starting. A lot of times the people that took down the P.P will promote the price of the stock up so they can dump their cheap stock.

Note - The rules on the VSE have recently changed and allow hold periods of only 4 months for some Private Placements.

On the flip side - if the P.P were taken down at far higher prices by institutions then you often see dumping when the P.P comes free trading. This often drives the price of the stock down temporarily. If I see a stock dumping I often go back a couple of years and try and find out who is responsible and why they are dumping. Often the president or other high up officals in a company will tell you where the dumping is coming from.

Once again - my two cents

Best Regards
KEITH
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