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Pacific Sunwear of California Inc. Message Board

  • blue_devil_ninetynine blue_devil_ninetynine May 28, 2013 1:11 PM Flag

    Insider Info

    I believe there was significant buying based on insider information on the part of a single entity prior to the most recent earnings release. Why do I believe this? Well, if you'll recall, PSUN was meandering along in the low $2's several weeks before the most recent earnings release. I then placed "good till cancelled" sale orders of 500,000 shares of PSUN at prices ranging from $2.60 to $3.00. This was based on my earlier prediction that the stock would hit $3 prior to the earnings release, and the fact that I couldn't expect to sell 500,000 shares at exactly $3. As soon as it was clear that those orders were out there at fixed prices and weren't budging despite daily price fluctuations, someone started gobbling them up one after the other. I don't think it was multiple buyers because I put my shares up in chunks of 50-60,000 shares, and most of them were gobbled up in one go. This would've been impossible with the kind of anemic volume we previously had in PSUN. So as my shares were being bought, I figured it was being done by someone with insider information, because nobody would be so aggressive in buying stock and driving up the price (in my opinion) if they didn't have information to indicate it was headed significantly higher. I believe the only reason they didn't drive the price up higher earlier was because there simply wasn't enough volume available on the sell side. They would've driven up the price a very significant amount to get a relatively small number of shares. Once I had assured them of large volume on the sell side, even though it was being offered at a significant premium, they grabbed the opportunity.

    I'm glad I sold my stock because I needed to sell and get some liquidity out of a stock that had previously been pretty illiquid. However, I had to come out and share what I found - someone else is playing this stock with more information than either you or I. Good luck to longs in PSUN - I hope you get $4+ this summer.

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    • Interesting story. You probably sold some to the poster who said they were short May 12, when the stock was still below $3.

    • I sold my last 40,000 shares today, so I'm officially out of PSUN. Not because I don't think it will go higher. But more because I'm starting to get nervous about the overall market (seems overbought to me), and I'd prefer to hold largely cash right now.

      And for those that think I'm making this up, I acknowledge that 540,000 shares was a stupidly large holding for a stock like PSUN. That's why I sold when I had the chance, even though I had an inkling someone else might've been taking advantage of me. That goes with the territory when it comes to micro-caps.

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