Elite Pharmaceuticals Inc (ELTP)

[WeeZuhl]

MM "bid support" = Hedge Fund Buyer

If you believe there is MM bid support, and if you believe that MM's always act in their own self-interest, then probably somebody who already holds a lot of shares is quietly buying a lot more shares, and that somebody is probably a micro-cap hedge fund. They want their shares cheap but not too cheap. The MM's, as always, are acting rationally and just following instructions-- keeping the price range in the sweet spot that the hedge fund has requested.

I like the thought but those shares are sold as quickly as possible.

Yes, precisely. MM's are buying those shares at the bid to fill an order. It perfectly explains why the MM's, while acting rationally and in their own best-interest, would support the bid. Inherent in the argument is that they also may be holding back the price at times. At the current share count, any one entity could accumulate 60+ million shares completely under the radar. Put a few names on those shares, and now you're up in Nasrat Hakim territory but completely on the down-low. (So maybe I prematurely dismissed a malevolent actor.)


Hedge Fund: Buy us 60 million shares at no more than .225 and no less than .215.

MM's: Yes, sir! How soon do you want them?

Hedge Fund: Before the announcement that Phase 3 efficacy trial has started.

MM's: Holy Crap! We've got to get busy. That announcement will be coming any day now!

Hedge Fund: Yes, this is what our extensive DD on the ihub MB tells us.

MM's: Okay, we will keep the price between .21 and .23 until we've acquired your 60 million shares.

Hedge Fund: No, let it run to .25 a few times. Then when you bring it down to .22 all the weak hands will let loose their shares.

MM's: Duh. We invented that trick.