8. so they pick a low volume date. wait for the end of the day to orchestrate their attack.
9. they send the market order for a few hundred thousand shares and drive down the stock price.
10. some stops get hit and exaggerate the down move a bit.
11. but again, no real selling followed through.
12. if anything, the short term trading buyers (who sold the high of the range) show up to buy the stock.
13. the stock bounces hard in the last couple of minutes as the sellers are gone and short term buyers jump in.
14. these buyers are likely to sell it back to the shorts at the high end of the range again as we get close the the Dec 23 as shorts will try to cover their short term trading position before then...just in case they might release the clean audit..
15. all in all this trading pattern shows an increasing nervousness on the part of the shorts. they are getting nervous and the stock is about to breakout of the trading range to the upside.
16. only time will tell if I am right about this.
17. happy trading.
1. The shorts were resorting to a questionable practice of stock manipulation. The shorts knew that the hit pieces were coming because they are the ones responsible for writing them, directly or indirectly.
2.So they got short ahead of time. the problem is, there is very little volume. no real buyers or sellers at this price range. their sales drove the price to the low end of the range. Some buyers show up at the low end of the range and they would have had to sell a lot more shares then what they are comfortable with in order to break the stock (even they know that nq is not a fraud). They also know the hit pieces they are writing is weak with no new information. so once the price drops to the low end of the range they stop selling.
3. the problem is that they are the only sellers. once they were done, their were no other real sellers. the price moves up mostly due to the lack of selling rather than big buying interest.
4. they decide to release the hit pieces. the problems is, no one is left to sell. most of the weak hands are out of the stock.. instead of covering at a lower price, they are forced to drive up the price of nq due to the lack of selling interest. this was their short term play to make a quick trading profit by trading around their core position but it back fires on them. so they ended up driving up the price as they covered. when price went up to the high end of the range, some sellers showed up. probably longs who are trading around their core position who bought the stock at the low end of the range.
5. since all the buying was done (the shorts were the buyers) the stock begins to retreat.
6. with the stock retreating the shorts feel stupid. they get #$%$ off at having covered some of their position at the top and begins to regret that they weren't more aggressive.
7. so they start re-establishing their short term trading position (on the short side again) and decides to go for a technical breakdown
you have completely misunderstood my question. I wasn't saying that nq was a junk company. I was just wondering if the company had fallen victim to a "death spiral financing."
is the conversion price permanently fixed at 25.00 without exception?
If there is a clause that lets the conversion price drop on quarterly or semiannual basis based on the stock;s performance, then a scheming and a manipulative institutions who hold the convertible bonds may have the incentive to short the stock without the fear of short covering rally since they can always convert the bonds and get the stock at a lower price by simply converting the shares. this scheme would only work if there is an adjustment clause to the conversion price where the number of shares or the conversion price would be adjusted based upon the stock's performance.
So is there anyone out there who is familiar with the convertible bond deal to answer my question?
thank you in advance.
this stock shouldn't be this low given all the facts that have come out thus far.
I don't think clean audit will have impact since no one in the market really believes that nq is fraudulent, not even the most staunch shorties (notice the "hit pieces" no longer claims any fraud?)
could the weakness in the stock price be related to the issuance of the convertible bonds?
does anyone know the terms of the conversion?
is it reset quarterly with numbers of convertible shares tied to the current stock price?
I hope the convertible deal was not a death spiral deal, if anyone is familiar with the deal structure please enlighten us here. thanks in advance.
for u.s. call: 1-866-519-4004 conference id: 87164502
I think there was a built up expectation on stock repurchase program being increased.
there was no mention of that...not even mention of aggressively utilizing the existing program.
If they don't mention it during the cc, this stock will take longer to recover. if they increase the repurchase program, and if Piper Jaffray reinstate their stock ranking we have a shot at $20 tomorrow. if not, it'll take much longer to recover. but it will recover soon or later.
1) I wouldn't be surprised if they do eventually. I believe they are waiting for the outcome of the independent investigation they started. You've got to present evidence when you sue someone. You can't come out swinging with empty shells like Carson Block.
2) I wouldn't be surprised if Shearman and Sterling advised against it. They are preparing exhaustive independent report which may be used for the basis of further legal action against CB. The legal team probably didn't want NQ to say anything unintentionally that may weaken their case in the court.
....just my two cents.
Just got a response from IR on two questions I had.
1) When will the rest of usd 100mm be transferred to Standard Chartered Bank?
answer: "By the end of this week"
2) Given the fact that you have hired Shearman and Sterling and DT for an independent investigation is there any chance that your 3rd quarter earnings report might be delayed?
answer: "No. we will not delay earnings"
As long as they have the whole usd 100mm transferred by the end of this week, and no delay in earnings,
this stock should be trading a lot higher by next Monday. Remember, no delay in earnings implies that PWC is comfortable with the 3Q numbers despite the fact that they are aware of fraud charges.
What happens after earnings will depend on the earnings report and what is said during the cc. I have a strong suspicion that we'll take out the old highs after the earnings report. We'll see...it's only a week away.