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FreeSeas Inc. (FREE) Message Board

  • ovcris ovcris Aug 4, 2010 10:27 AM Flag

    Why the low volume?

    First time posting but I am long this stock. Why the low volume? Any guesses?

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    • Level two is showing $.09 eps for Q2 but that is not an official announcement.

    • When stocks reach low levels, most of the people who wanted to sell have already sold. The question is "to whom did they sell?" Usually they sold to investors/traders who do not panic if the price drops somewhat lower, and, who had specific reasons for buying the stock at those low levels as well as targets for expected profits. As the purchasers in the latter category accumulate shares the "float" is reduced, since the shares are being accumulated to hold for higher prices. Over time the volume must drop as well, since the new purchasers aren't offering shares for sale. Eventually, the float becomes so low, any additional buying pressure causes the price to start advancing, and new folks start buying. When the price rises sufficiently the original purchasers begin selling out to new buyers at "high" prices to take their profits. After the "distribution" the price then drops as the knowledgeable folks don't buy at high levels.

      Repeat the process.

      People have been accumulating this stock for quite some time, and, IMO most have a target price well above 1.20 for the resale of their shares.

    • Persisting uncertainties...

      BHSI has retraced back below 1000, that's over 30% down from its May peak; small cap company, meaning bigger financial risk; potentially about to push itself financially to order 2 new vessels at a time when there's a glut of new vessel orders; wider markets are in a summer rally, but will it last?

      When there's lots of uncertainty, sometimes the best course of action is to hold the current line...but FREE's mgt seems incapable of sitting still. They're either genius or just heaping more misery on themselves (and us shareholders).

      I predicted the recent pullback to sub-1.05; I predicted the recent rally back up to 1.15-1.20 pre-results.

      Honestly, I have no idea which way this is going to go from here and I do this for a living(!). Hang on to your hats.

      good luck all longs,

      sjm

 
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