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ITT Educational Services Inc. Message Board

  • stephensonfam2004 stephensonfam2004 Apr 1, 2013 10:29 AM Flag

    Why the selloff today now?

    This stock opened up and then sold off heavily. What's the deal? A bunch of short sellers again. Seems like these trolls come and go over in every company. I mean this stock in incredibly cheap, compared to its past. I'm sure some would question the management at ITT since the value got driven down so hard. I couldn't say I'd disagree with that.

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      This is not news in my opinion, but the only relevant release that I see after previous market close. The investigating firm has been likened to ambulance chasers. They might be investigating me now that I wrote that.

    • I was looking at the share price today and saw it go down at the open and continue straight down through noon. There is no news, unless there is something that I can see. So why are shares down 7-8%? That is a significant percentage drop. Usually when a stock drops close to 10%, there is some news.

      Overall, I think what is going on is that the short sellers are manipulating the stock. They start the first day of the second quarter by selling short aggressively. Shares are thinly traded, so any one-way buying or selling can really move the shares. This knocks the stock down hard on the first day of the quarter and chases many relative performance investors away. Everyone assumes tat there is something wrong. What large money manager want to start the quarter down 8% in any stock one the first day out of the blocks? I have studied the past price action of ESI shares going back years and noticed how the shorts used to do the same on the day that ESI would report quarterly results, even though the results were hugely ahead of estimates quarter after quarter. When people would see the stock decline on the good earnings, everyone would freak out and and assume that there was something awful in the report. There is no legitimate reason to sell ESI shares today. If anyone really wanted to sell out their positions, they would do it late last month before the quarter ended. In that way they would not have to show in their portfolios that they owned ESI. The purpose of driving ESI down today is to create a bad perception at the start of the quarter, regardless of the valuation, fundamentals or whatever.

      • 1 Reply to thedeathrace
      • Good explanation. The whole perception of short selling makes no sense to me, betting against a company to make money. But that's just me. If you don't like a company, don't buy it but, allowing people to bet against it to make money, it's just like a casino. Oh well, I'm glad you explained things. I'm not selling it, it's been killed too much, too fast. It's got to turn around at some point. I figure all the bad news has to be caked in on this one.

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