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Re: None

Friday, 09/23/2016 3:38:12 PM

Friday, September 23, 2016 3:38:12 PM

Post# of 29217
Better explained

Here is a basic scenario of what happens during periods of dilution, and the ultimate reason for a stock pps decline:

Dilutive MM shows up on the ask (e.g. BMAK or VFIN/VERT)
MM's such as VFIN & VERT work in tandem to maximize the pps realized for the group or individual selling the stock.
One shows on the bid to symbolize strength, while the other will show 10k on the ask so that those buying will buy at the ask instead of parking on the bid
It might take a day or two for the market to realize that dilution is in fact taking place
The chatter on stock message boards quickly changes
New aliases show up touting the ill effects of this dilution, calling the company a scam, POS, and more
This causes emotional investors to react irrationally selling into the bid
Short-selling commences and often-times involves them jumping over the dilutive MM to sell shares to the interested buyers
Then the walls on the ask show up to push the price lower to be able to cover
If the dilutive MM is not finishing selling their shares, this cycle continues and the short-sellers can continue to depress the stock price