Gene, anything to add to this?
Questions from stopmmmanipulation.com
1. Are you an investor in a company listed on the OTC exchange?
Hmmm. First of all, the OTCBB is not a stock exchange. The difference is far from semantic, and you might want to be up to speed with the differences before you start throwing money at the issues trading there (or elsewhere, for that matter).
Second, I think that, for the most part, the word "investor" and the trading activity that goes on w/regard to the OTCBB are ill-paired. As a highly speculative venue, it's probably not the place to be doing your "investing." Definitely not if you're under the impression that it's a stock exchange, LOL.
2. Have you seen your stock plummet in the past months to 1/4 or less of your original purchase price?
If this is your experience, and you're surprised, you probably shouldn't be playing with low price, thinly-traded issues that are subject to minimal issuance standards in the first place.
3. Have you seen the price of your stock decline while the fundamentals of the company have remained the same, and in many instances, have greatly improved?
What's the point here? First of all, name a single wirehouse that has analysts covering OTCBB issues. (It's ok; I'll wait.) Second, fundamentals are very subjective, particularly when the companies have a minimal degree of obligation to report their ongoing business operations and results.
Lastly...if you think the prospects for the issue in questions were really improving, don't you think the stock price would be going up? And don't you think that dealers would want a taste on the way up? Where would the incentive be to push down an issue that "should" be going up?
And, let me pre-empt the "pushing down to get an average price" crap by saying that trading an issue lower to get a lower average purchase price is both (a) manipulative, and (b) bad/senseless business. The overriding goal of a dealer is to trade with the optimal allocation of capital while limiting risk as the situation dictates. The idea that a dealer would risk his and his firms' licensure, capital, and reputation by purposely lowering a drill bit such that he can purchase more stock at lower prices is nothing short of ludicrous.
4. Have you seen the price of your stock continually decline, yet the number of buys consistently outweighs the number of sells?
Wow - you're pretty good if you can tell, from the time and sales exactly which of all the prints are buys and which are sales. That said (and in addition), if you've heard of Regulation S, you'll realize that what you see on the tape and what goes on behind the scenes can often be extremely different stories.
And, for reasons I really don't want to get into here, suffice it to say - as a few others have indicated correctly - more buys than sells do not automatically imply a rise in an issues' price.
5. Have you seen thousands upon thousands of trades go through at the ask while a market maker refuses to raise the asking price?
Yes, I have. It's called selling. I'm going to assume that the suggestion here is that the trades "go[ing] through at the ask" are people buying at the offer. So what? To use the term "refuse" w/regard to a dealers' actions is to suggest that there is some obligation w/regard to moving prices. If the force was there, truly pushing north, he'd get out of the way or another dealer would have him on the phone, trying to clear him out.
If the trader has a large inventory position, and chooses to let some go there, that's what he does. I have a feeling that there are as many people who would complain about (a) the spread widening and (b) the effect of a dealer suddenly lifting his offer as there are complaining about him standing pat.
6. Have you seen the asking price on a stock decline on little or no volume?
I sure have, and therein comes the danger of a thinly-traded issue. First, small floats generally make for big moves. Second, small floats make for dealers not wanting to be over exposed.
They're in the job to DEAL in the issue, not to own it. If it's a tight one, and he wants to bring in some buyers, and no one else is moving, what can he do? For a $1.00 stock, moving the price to 63/64 is hardly going to bring an onslaught of buyers, is it? So, he'll move the stock down 7/8, perhaps. Now, from a buck offer to a 7/8 offer is a 12 1/2% move. On a $50 stock, that'd be a move to $43 3/4. Ouch, huh.
7. Do all these questions sound like a daily occurrence that you have experienced as an active trader/investor in the OTC market?
Let me just answer this with a line from the Hippocratic oath. To the conspiracy theorists, the fearful, the angry, the confused, and the various others searching for answers in what is, even to many professionals, a confusing and sometimes contradictory undertaking:
FIRST, HEAL THYSELF.
Nothing wrong with asking questions - that's crucial - but a little due diligence (beyond the actual issues being traded!) will get you where you're going.
LPS5 |
