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Wednesday, January 11, 2017 12:10:07 PM
Let's say a company has 1000 shares of stock which today is $1.00. And you, an insider or warrant holder, want to sell an additional 100 shares. Let's look at the math.
If the company has been around $1.00 for a long time the average cost per share of retail can be assumed to be GREATER than $1.00. So, if the insider just decides to dump 100 extra shares into the float the price will crash people tend to sell in small downward moves and hold after drastic ones. Like I am down 10% panic, I am down 90% oh well it has to go up sort of mentality.
So what you do is you start to buy up shares in small chunks, hopefully as cheap as possible. As more people begin to sell, @ 0.95, 0.90, etc the float of the stock constricts. These weakening markets bring in shorts if not already there. Thought, stocks below $2.50 attract far fewer than above $2.50.
The cost of the shares being bought is BELOW $1.00 and anyone on retail holding still has a cost per share is GREATER than $1.00. So what you have are cheap shares < $1.00 and a float that is acting like there are fewer than 1000 shares and increased shorting.
This is why share liquidation schemes spike. When the stock spikes, retail seems to hold so as shorts cover dilution can occur. The shares bought at .90 or whatever can be held for weeks and just sold back at $1.00.
In order to really profit, the stock needs to move 250% for things like warrants as they are options priced usually. If you want to see this happen go back to APDN to 8 or just recently BLPH went 1.35 to 4.55 in a day.
When volume dries up flippers are pushed out as well, especially in a price restricted stock like APDN (i.e. 0.05 bid/ask) this further puts on downward pressure.
Can take... days.... or months.
Recent APDN News
- Form PRE 14A - Other preliminary proxy statements • Edgar (US Regulatory) • 03/04/2024 10:18:33 PM
- Form SC 13G - Statement of acquisition of beneficial ownership by individuals • Edgar (US Regulatory) • 02/12/2024 09:25:36 PM
- Form D - Notice of Exempt Offering of Securities • Edgar (US Regulatory) • 02/12/2024 09:09:17 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 02/08/2024 09:05:22 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 02/08/2024 09:01:31 PM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 02/01/2024 09:05:28 PM
- Form 10-K/A - Annual report [Section 13 and 15(d), not S-K Item 405]: [Amend] • Edgar (US Regulatory) • 01/26/2024 09:24:06 PM
- Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend] • Edgar (US Regulatory) • 01/10/2024 10:16:03 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/08/2024 12:00:26 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 01/05/2024 09:30:00 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/07/2023 09:05:23 PM
- Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405] • Edgar (US Regulatory) • 12/07/2023 09:01:50 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 12/06/2023 09:05:24 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 11/07/2023 10:09:34 PM
- Form 424B5 - Prospectus [Rule 424(b)(5)] • Edgar (US Regulatory) • 11/07/2023 10:02:31 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 09/20/2023 08:05:11 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/10/2023 08:05:45 PM
- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 08/10/2023 08:01:59 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 08/01/2023 08:02:12 PM
- Form 8-K - Current report • Edgar (US Regulatory) • 07/13/2023 09:04:44 PM
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