There are three possibilities as I see it. The most likely, in my opinion, is that the buyers are using limit orders to negotiate with the market makers on price instead of buying "at the market". Individual investors don't seem to use limit orders so much, probably because the size of their trading volume tends not to be large enough to move the market in and of itself. Of course, with BB stocks, such as LONE, the market is miniscule enough that just about every trade can affect it to a significant degree. Institutions and other professionals use limit orders on a regular basis. Their volume can move the market of all but the stocks with the most liquid markets, which is not always desirable, sometimes it is though. A large trade passed at shortly before noon in excess of 125,000 shares--that is a major block trade for LONE stock. It appears to have been at the "ask" and doesn't look like it moved the market, which I'm sure would have happened if it were "at the market" given that the "asking" size was just 5,000 shares. If it were "at the market", I bet that trade would have moved the price by four or five cents alone. Think how much you could move the market with that vol. if you didn't care how much you paid and broke it into small blocks of 5,000 shares each for a total of more than twenty-five separate trades. That the price didn't move on that vol. implies to that the purchser used a limit order and the size indicates that it was probably institutional of some sort. Remember that two mutual funds, including one run as an annuity by the recently sold Sun Co., Conseco's great peer and rival, and also First Madison's clients own LONE stock. That F. Mad. owns LONE may be what has kept them in LONE's corner through this period of troubles. I expect that F. Mad. is the investment banking agent putting together the reverse mergers by introducing LONE to these co's.
There are two other possibilities. One is that the natural interaction of buyers, sellers, and market makers balanced out the last two days, which I tend to discount. The third possibility will appeal to the conspiracy theorists amongst us, which is that some sinister entity is countering every "buy" with a sale of an equal amount of shares to keep pressure on the market. I discount this idea as well but don't think that it is completely outside the realm of possibility. |
