Will purchase another 1000 shares this month, thanks shorty for the cheap shares.
If the market maker now goes and hits the bid of his competition, even for a small amount of stock, let us say 1,000 shares, the last sale is showing is now 0.20 and the stock is down 23% on heavy buying of 30,000 shares, but it looks like the stock is being dumped in a panic.
What is the effect of this false appearance on the market? First, they buyers apparently have an immediate loss of 23%. Second, anyone with a buy order may hold off on buying to see where the stock stabilizes. If the company is trying to get people to buy the stock, as it has a right to do, it is going to be much harder to whip up enthusiasm as the stock looks like it is crashing.
Sellers, if they panic, will now come in and sell. In fact, the stock could be so demoralized that, hypothetically speaking, it could close at 0.14, down 46%, but again, this is only fictional, right? Now if we were to check NASDAQ Short report to see what the volume of trading vs short selling looked like, we might find that half of the volume was short selling, theoretically speaking, of course. Presumably this would be by the market makers going short at 0.259 and 0.258 and elsewhere to push the price down. We would also find that half of the selling might be from long sellers who went into a panic, perhaps maybe.
Now again, all this is a merely fictional example, and I would never accuse my fellow market makers of doing anything this destructive just to make a fast buck. But it is the type of thing that I now get paid the big bucks to discover and combat. Why? Consider what this means to the company. If the company had a $100 million market capitalization, reducing the price by 46% is a $46 million loss for the shareholders on a day when there was really nothing but buying in the stock. If the company is selling stock to raise money, say $10 million, it means that it has to now pay stock with a value of $14.6 million to get the same money – a loss of $4.6 million.I wrote this years ago to advise companies how to fight off predatory short sellers (of which I was one) only to find that the shorts reverse engineered the techniques and had a field day bringing down public companies. That’s life in the jungle of Wall Street – the lions eat the gazelles who are too slow.
In the stock market, price is the best advertising. A stock that is going up tends to create the belief that it will continue to go up, and thus demand is created. Price gets attention. We see the change in price and the price chart as a guides for action.
Short squeezes – buying panics – are created by rapid upward price movement and so feed on themselves.
Now, if I told you that I, as a market maker, could drop the stock price in the face of consistent buying and so go short and create panic selling, you might find this to be new and rather electrifying information would you not? That’s why you are reading
Here is the simple and little known trick of market makers.
We start with the inside bid ask of the stock, let’s give a hypothetical market, $0.20 bid offered at $0.26, with the last sale being at $0.26.
Now of course this is not a real stock and I am not going to give you real history. Any close similarity between this delusional and fictional narrative and exactly what happened to a certain stock – yesterday – is simply a matter of total coincidence despite your swinish suspicions to the contrary.
A buy order for 10,000 is entered and instead of being executed at 0.26, the market makers made the sale at 0.259, so that the buy order actually dropped the price compared with the last sale of 0.26 – so the stock shows 10,000 shares traded on a down move – making the buy look like a sale.
About 10 minutes passes, and another buy order, this time for 20,000 shares is entered and that is executed at 0.258 – another down tick on another buy order!
So now the stock is down on 30,000 shares of buying only – no selling.
Folks, that is not normal supply and demand, is it? You would expect that on buy orders the stock would go up or at least stay the same, would you not?
My prediction is:
1. All of 2015, institutions will continue to accumulate; upto 75% of the shares outstanding
2. Stock will remain between $2 and $4 till Oct-Dec 2016
3. Oct-Dec APD 334 phase II results will be released with extraordinary results
4. MM-Institiutions will hype inflate price to $40-45 p/s
I am long ARNA
Just a predection.....
NO, I DIDN'T THINK YOU WOULD.
Just said Stockvadar using false ID to look like StockvadEr. Short BS tactics to get retail longs to sell, absolutely ridiculous.
Everyone who's been in the market knows this is a complete fallacy!!! If this where true of ARNA, how is it that the institutions are buying up all the shares and the price is declining. SIMPLE FACT THEY SET THE PRICE NOT THE SUPPLY OR THE DEMAND. Retail investors owned the majority of the shares, instititutions wanted those shares on the cheap. So they dictate the price... LOWER THE PRICE THEN THEY START ACCUMULATING THE SHARES.....WHEN ARNA WAS APPROVED BY THE FDA INSTITUTIONS OWN less than 25% NOW THEY OWN ALMOST 60%.....EXPLAIN THIS ONE....
Such concerns are well founded. Traditionally, being overweight in India was seen as a sign that your family was prosperous. But as the country’s economy has boomed, consumers have developed a taste for Western-style fast food. In July, a 225-year-old traditional sweet shop in Delhi was forced to close its doors as the taste for chocolate outstrips the demand for time-honored treats. As a result, the South Asian nation’s obesity rate has soared. A study published last year in the medical journal Lancet revealed that one in five Indians is obese, and as many as 60 percent of people who live in India’s cities are estimated to be obese.
The committee recommended that the shops be prohibited from selling unhealthy items to kids who are wearing uniforms—it’s easy to identify pupils in India, because nearly all primary and secondary institutions require students to wear school-specific ensembles. The prohibition would include brick-and-mortar shops and restaurants as well as food carts that can be pushed from place to place.
LIKE CLOCKWORK, can't wait till Monday to see what happens.
times there revenue. They use the BS argument to justify the MM Manipulation of the stock so large institutions can buy your shares for the cheap. This is there play book for small cap biotechs.
Drug gets positive results or approved; run the price up a bit, then naked short as long as it takes to recover all the while continue to buy on the way down until they own 90+ percent of the stock. Then inflate the price to an astronomical number.
Examples: JAZZ, VRTX, KERX, DNDN, ICPT, RCPT, etc.., etc....
As you can see that was a buy order..and still didn't move the price that much higher, absolutely sickening manipulation...
POSTER IS VERY LONG ARNA
This is the reason you see the SPOOFING of sell 100, 100, 200, 100, 500, then buy 1000. It's evident on the NASDAQ website, look at the real time trades.
The SEC is powerless against it unless the company sues and ID's the naked short sellers and the spoofers.
BOUGHT and PAID FOR......
"The Securities and Exchange Commission suffered a fresh setback to its controversial use of in-house judges, when a Manhattan federal judge ruled Wednesday the tribunal was likely unconstitutional. U.S. District Judge Richard Berman is the second federal judge to find the SEC didn't appoint its five administrative law judges correctly, adding to pressure on the agency to reform the system. Judge Berman agreed Wednesday to temporarily halt an SEC administrative action against Barbara Duka, a former Standard & Poor’s Ratings Services executive. Ms. Duka, who denies the SEC’s civil allegations of fraud, sued the agency over its decision to try her before its own judges. [...] In his ruling, Judge Berman said that if the SEC were allowed to go ahead with its in-house case against Ms. Duka, she would “be forced into an unconstitutional proceeding.” The SEC in-house judges involved in her case were “not appropriately appointed,” the Manhattan court found. The SEC is battling several other federal court challenges, which are fueling criticism from defense lawyers and business groups that the system is unfair, particularly for more complex cases. The criticism concerns a crucial tool in the SEC’s enforcement armory. The agency has been sending more cases to its own judges, in part because of new powers granted by the Dodd-Frank financial law of 2010. The SEC sent 82% of its cases to its in-house judges in the six months through March, according to Cornerstone Research, compared with less than half in the fiscal year ended September 2005."
Of course the judge is from Manhattan!!!!! Who do you thinks paying him........BOUGHT AND PAID FOR!!!!
This is sickening....That the SEC let's this go!!!!!
Spencer, First, you said the stock price was over valued! The question I ask again, who puts the value on a stock? Sorry, that was a rhetorical question-the market makers do. Who do the MM work for? Again, rhetorical...That's right the institutions. Spencer, I've played in biotech for the last ten years, and this playbook that the institutions use is sickening! I truly write to educate the retail investor, you on the other will feed them slices of facts based on information that's already readily available to all. What readers expect is nuggets of information that will make them better informed when investing or trading. Your, articles would be much more beneficial if you included market dynamics aside from weekly sales numbers, and tv ad numbers. What is the overall strategy of the big boys playing this stock? (Compare, OREX, VVUS, ARNA-strategic initiatives, pipeline growth, political decisions effecting the company/companies, outside threats, M&A potential etc. So, what I'm saying spencer is write something with substance that readers want to read. I see your articles and I skip to the end to see what logical comments are being rendered below, because I already know what's in the article from the headline. (I listented to the CC, I get the IMS numbers, I get the TV ad information-regurtitation of the facts). I want an orginial thought! "These are not the Droids you're looking for"