by: serenic1 07/24/05 09:17 am
Msg: 18429 of 19651
A STRATEGY WHEN TRADING RESUMES
by: serenic1 07/23/05 11:10 am
Msg: 17560 of 18425
Many of us are numb after yesterday's news,but now is the time to think-out a strategy for action when trading is re-activated. This applies to longs and shorts. Because of the volitility of this stock, many traders have taken positions on both sides which have proven profitable.
It appears most unlikely that longs whom have purchased after 7/12/05 will not take a substantial loss and that shorts will most likely make a sizeable gain. Having said that, let's not think of the other as the enemy camp. Instead, let's welcome thoughful, constructive input, preferably from experienced traders and especially those who have experienced trading halts and suspensions, be they long or short.
It is suggested that all comments be restricted to the use of the above heading as this will allow for a concentrated sharing of views that will by-pass much of the witless and profane bashing that appears on message boards. Indeed, if any of these destructive individuals post under this heading, please do not respond to them and place them in "ignore"
Thanks for the reply Chargergrl. I hope Scottrade has heard of this $1 buyback program. LOL. Now that the SEC has made this a formal investigation, I'll breathe alittle easier. More likely to be a slow death spiral now rather than a sudden removal from the market place. Now we should be thinking about an exit "strategy"! Like how much below $1 should I cover! LOL
Sure thing Bushwacker....I was in DGIV...Digitcom Interactive. They were delisted a few years ago after it was found that their PR's were misleading. I remember it because it was the first stock I ever got into and I lost everything...so I can empathize with the longs here.
I got this information about the $1 buyback from a broker at UBS. It happens when a stock is delisted and shorts need to cover their positions. It's similiar to a deed transaction on properties that have no value, for legal purposes they offer $1 to conduct the sale. That's what I know about that =)
I agree that it probably will trade again on some exchange, but it's not guaranteed. If criminal charges should be forthcoming amoung the company insiders and the market makers and/or specialist, they can stop this company from ever trading in the public markets again. I'll admit, it's not likely.
Question; What other stock have you been in that was suspended?
This caught my attention; I learned that shorts can go to their broker if a stock is delisted and no longer trades and can purchase the shares they need for $1....oddly enough it's called a $1 buyback.
I've never heard of such a thing. Would you elaborate further?
Cafe.pk pink sheet if no market maker on nasdaq wants its listing or if nasdaq saw the serious nature of investigation to warrant to ban on continued listing.
if cafe get kicked off nasdaq and then trade in pink it won't be pretty down there. Cafe dressed up in girly suit won't paint a good picture.
You're right, they can't issue a PR during this time period. All communication, not just the 7/12 one is being examined here. The trick will be on 8/5 and whether or not CAFE will be able to do anything to restore investor confidence.
As for the stock never trading again...that's not going to happen. It will trade again and in all likelihood on 8/5. It might however have a new symbol....CAFE.pk. This is what happened the other time I was in a suspended stock. I learned that shorts can go to their broker if a stock is delisted and no longer trades and can purchase the shares they need for $1....oddly enough it's called a $1 buyback.
I hesitate in saying this but I've seen alot of disinformation on this thread and I'd like for investors to know truly what they're dealing with. It was horrible when I was on the long side sitting through those two weeks =(
I know one prominent poster from another board shorted this in the 7's and again in the 8's. They will probably be bashing for the next 2 wks but when it reopens and longs decide not to give away their shares it might not drop as much a they want it to. There are a lot of people who bought >$15 and I can't imagine them selling below $10. I don't have that many shares but I'm not going to panick. I know most people think Cramer is a jerk BUT, he reiterated thursday night never sell in a panick and the bashers have 2 wks to work on your psyche. I still have not found anything in that PR release that would cause this big of a problem.IMO -
I agree and this is a well thought out post...which is probably why I'm responding to it at this point.
I was unfortunately on the other side a few years ago in a stock called DGIV. It was halted and ultimately delisted to the pink sheets for sending out misleading information in its press releases, a situation similiar to CAFE...though worse at the time.
It will be open for trading on the 5th, not before and it will be done without any sort of a press release or fanfare.
I am short this time on CAFE. I chose this position Wednesday before the SEC came out with their "informal" request because of simply the trading activity of this stock.
I expect that the stock when it reopens will quickly retrace to its levels before the run up (which it should if the Walmart press release is really a non event and was hyped to the unknowing). So that pulls it to the $3-$4 range. After that is anyones guess, but if I'm correct and it does end up there, I'll cover at that point.
That's what I think will happen...we'll see how it goes =)
First, shorts are the enemy of longs. Don't be naive. Yes, the two shouldn't be rude to each other, but they are definitely adversaries by definition.
Second, since we don't know how many shares were shorted, I think it's impossible to predict how the stock will trade.
Third, it depends on whether CAFE is exonerated of wrongdoing by the SEC. If it is, I think a few market sell orders fire off, and then we are back to point #2, how many overall shares are short??
If the answer is in the tens of millions, as I believe it is, then we simply resume trading as it was before the halt.