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Sorry Rainmaker I have a question. On what do you base this comment?
Also there were likely a lot of warrants and options exercised since last filing. 90 to 100 million shares o/s seems closer to current numbers based on those stock warrants and those stock option grants and stock option
Shorts betting against a company is not always an indication that they have knowledge no one else does. Take a look at Netflix recently. Lots of bears in that, they got their heads handed to them. It is interesting that many people think that shorts always have some information that is superior to the long case. Another example i just though of is Blackberry. The stock was on its' death bed in September @ $6 recently there was 169 million shares bet against it ahead of their BB10 launch, look at the stock price recently. It's been as high as $18 a triple off the lows in 4 months.
The simple answer is that the TUTs would rather not lose money. In your roulette example $1000 on red alone is a total loss if it comes to black. I am not that familiar with roulette so I may get this wrong, however if the $600 bet on black comes up they win some multiple of that which offsets the 1000 bet on white, now they don't win as much as if they bet on black alone and are right but if they are wrong they lose it all. In the stock market of course it does not work this way. You can sell you positions quickly or slowly. They (group one trading) did buy over 332,000 shares outright, and if my analysis is correct they hedged by purchasing puts at some strike and month which I am not aware of. This protects them on the downside. Simultaneously they sold calls which creates a collar. They would receive money or credit for the calls, again at an unknown strike and month. This would lower their average cost which I believe is $2.87. So with an average around let's say $2.60 if the stock pops hard, they will sell their puts immediately and they will give up some of their stock at a certain price which is unknown. They will not lose money in this scenario. They will not make as much as if they went all in on the stock but they will not lose which I think for them is more important.
They would rather make less if they are right than lose a lot if they are wrong. Many companies use options as hedges. You would be surprised to know that the biggest option "player" in the world is Warren Buffet.
You can verify Group ONe's strategy here:
http://whalewisdom.com/stock/vrng#
Most likely it is a collar strategy where they are long puts and selling call options. It's hard to know the strikes and months used but it is definitely a hedge strategy. My explanation was in error but the strategy is most likely a collar.
This is what I think they executed:
The investor writes a call option and buys a put option with the same expiration, as a means to hedge a long position in the underlying stock. You could say that this strategy combines two other hedging strategies: protective puts and covered call writing.
Usually, the investor will select a call strike above, and a long put strike below, the starting stock price. There is latitude, but the strike choices will affect the cost of the hedge as well as the protection it provides. These strikes are referred to as the 'floor' and the 'ceiling' of the position, and the stock is 'collared' between the two strikes.
The put strike establishes a minimum exit price, should the investor need to liquidate in a downturn.
The call strike sets an upper limit on stock gains. The investor should be prepared to relinquish the shares if the stock rallies above the call strike.
Summary
The investor adds a collar to an existing long stock position as a temporary, slightly less-than-complete hedge against the effects of a possible near-term decline. The long put strike provides a minimum selling price for the stock, and the short call strike sets a maximum price. (For a short stock position, a long call could be combined with a short put.)
BTW I calculated they entered this position with an average stock price of $2.87
One more point about the insider buys made in November. I found this to be useful:
Insiders Buying
When corporate insiders are buying stock, the signals are a little easier to understand. You typically buy for one reason – because you believe the price of the stock is going up.
This doesn’t mean it is going to pop next week. Frequently, executives buy way out to avoid the appearance of illegal insider trading. However, if key executives are buying stock it is usually a good sign.
Don’t be misled by single purchases, however. Most companies require top executives to own stock and will lend them money to buy shares. A new executive may buy a sizable block regardless of the future prospects simply because it is expected.
You don't know that (another large CREZ project) you are just speculating this is the case.
To prove my point about stocks moving prior to news I present 2 of the biggest small cap winners in 2012 and the news flow
First BDSI up 670% last year from $.84 to $6.45
This was written in March stock already at $2.35 so almost a triple off the low. The news actually is negative discussing delays.
Potential Catalyst price movers:
Recently, BDSI had an issue rolling out Onsolis, which is an opioid analgesic indicated only for the management of breakthrough pain in patients with cancer, 18 years of age and older, who are already receiving, and who are tolerant to opioid therapy for their underlying persistent cancer pain.
On Mar 12, 2012 BDSI announced Onsolis distribution was being postponed until the product formulation can be modified to address two appearance issues raised by the FDA following a recent inspection of the Aveva manufacturing facility where Onsolis is produced.
Anticipation for the rollout of Onsolis to actually occur should give BDSI some upward price movement.
So what happened to the stock price? It stayed in the $2.30 range for the month of March and then went to $4.30 15 days into April. So what was the news? It came in late April
Following the decision of the US patent and trademark office to extend the patent protection of BioDelivery Sciences International’s (BDSI) pain candidate BEMA buprenorphine by seven years to 2027, partner Endo Pharmaceuticals (ENDP) will pay $15 million as milestone payment to BioDelivery Sciences.
We remind investors that in January 2012, Endo Pharma had inked a global license and development agreement with BioDelivery Sciences regarding the latter’s pain candidate BEMA buprenorphine. Per the terms of the deal, Endo is responsible for the manufacturing, distribution and commercialization of the candidate on a worldwide basis.
By this time BDSI has already moved from $.84 to $4.49. I think this one is obvious as to my point of movement ahead of news.
Lets look at another big winner Elli up 405%
It went from $5.11 to $28 Jan to August 2012
On Feb 24 2012 there was this:
Ellie Mae Inc., the mortgage- software company, surged to its highest since it first sold shares to the public in April on strong fourth-quarter earnings and reports that signal the housing market is stabilizing.
Ellie Mae rose 13 percent to $8.98 at the close of NYSE Amex trading. The Pleasanton, California-based provider of mortgage-origination software and services offered stock at $6 a share in April 2011.
This is their Fourth Quarter results....reported Feb 23
Ellie Mae Reports Fourth Quarter and Fiscal Year 2011 Results
Fourth quarter 2011 revenue up 48% year over year to $18.8 million
2011 revenue up 28% year over year to $55.5 million
2011 adjusted net income up 52% year over year to $4.9 million, or $0.24 per diluted share
PLEASANTON, Calif.--(BUSINESS WIRE)--Feb. 23, 2012-- Ellie Mae® (NYSE Amex:ELLI), a leading provider of on-demand, enterprise level automated solutions for the residential mortgage industry, today reported results for the fourth quarter and fiscal year ended December 31, 2011.
Strong numbers but ELLI already moved from $5 to $9 ahead of this. FRom there it tripled
May results
Ellie Mae Reports First Quarter 2012 Results
Revenue up 97% year over year to $20.9 million
PLEASANTON, Calif., May 02, 2012 (BUSINESS WIRE) --Ellie Mae®(NYSE Amex:ELLI), a leading provider of on-demand, enterprise level automated solutions for the residential mortgage industry, today reported results for the first quarter ended March 31, 2012.
Total revenue for the first quarter of 2012 increased 97% to $20.9 million, compared to $10.6 million in the first quarter of 2011. Net income for the first quarter of 2012 was $3.6 million, or $0.16 per diluted share, compared to a net loss of $(0.8) million, or $(0.22) per diluted share, in the first quarter of 2011.
Finally the next quarter results on aug 1
Ellie Mae Reports Second Quarter 2012 Results
Revenue up 106% year over year to $23.6 million
PLEASANTON, Calif.--(BUSINESS WIRE)--Aug. 1, 2012-- Ellie Mae® (NYSE: ELLI), a leading provider of on-demand, enterprise level automation solutions for the residential mortgage industry, today reported results for the second quarter and six months ended June 30, 2012.
Total revenue for the second quarter of 2012 increased 106% to $23.6 million, compared to $11.5 million in the second quarter of 2011. Net income for the second quarter of 2012 was $5.0 million, or $0.21 per diluted share, compared to a net loss of $(40) thousand, or $(0.00) per diluted share, in the second quarter of 2011.
So basically this company had strong earnings that just kept getting better. I think GV will be able to show this even without a new contract announcement. However as I said I looked at the CREZ operation and there is so much work available I would be shocked if they did not land at least one more contract or more.
I see GV continuing to go higher on expectation of positive news from earnings and a possible new contract or two. There are very few shares outstanding and only 1.1 million shares owned by institutions as of 9/30 I expect this number to be much higher when the December quarter gets announced next week.
Sorry I couldn't respond earlier as I had exhausted my daily post limit. Anyway last year they made the CREZ announcement at the end of February. I am guessing there should be news in the next few weeks. There are obviously people who know they are working on a contract and most likely to be awarded one. The question is how big and when. Public knowledge is not all the knowledge there is. As a company they won't announce anything until its done, but there are many people who work on these contracts and they know. The employees in the company wold have a conflict but those who don't work for them don't.
Monday, 27 Feb 2012 09:15am EST
Goldfield Corporation announced that it has been selected as prime contractor by South Texas Electric Cooperative, Inc. (STEC) to build the new Bakersfield to Big Hill 345kV Transmission Line in the Texas counties of Crockett, Pecos, and Schleicher. The project is a Competitive Renewable Energy Zone (CREZ) Project. The Bakersfield to Big Hill line will be approximately 110 miles long and will connect the Bakersfield Substation, just south of McCamey, Texas to the new Big Hill Substation, just north of Eldorado, Texas. Goldfield's electrical construction subsidiary, Southeast Power Corporation, plans to commence work on this project next month. The project is required to be completed by July 31, 2013. Goldfield estimates that the revenue to be recognized over the life of the project will be approximately $52 million.
True but if you watched the trading today you would have noted that there was a wall of 100,000 shares at $3.00 that was taken out in less than a minute. This is not indicative of no business after CREZ. Insiders purchased in November, new equipment purchased last year, if this was all there was that would be foolish. Management has been clear in that there is more business coming from Texas. Actually I took a look at the CREZ operation the authorities that create the contracts, there is a tremendous amount of business there and because GV is already working on what they say was the largest project ever awarded there is a reasonable expectation that more contracts are coming. If you wait for the contract to actually be announced this will be $5.00 . If you study stocks that have abnormal volume increases as I have the news always follows the stock price it is rare for a stock not to move before a major announcement.
Well basically if you have followed this stock you will note that the short position keeps increasing and they are not covering at least not yet. Let's say the ruling is handed down and Google states they will appeal, Vringo won't get their money it will go into an escrow account. How does the market interpret this and how will the shorts scare people because they will pull off many tactics. The media has not been friendly to Vringo even today they keep repeating the reduction in percentage which is true but this is because of dilution not in absolute terms, in fact it was a 100,000 share increase for Cuban.
I was watching Vringo and it was all over the map, trading one second at $3.14 and the next at $3.23, if such a simple point like this can't be analyzed properly what are the shorts going to do with a decision that is not clear in any way? Also the other cases ZTE won't go to trial till the summer and Microsoft next year. Vringo hasn't exactly been transparent in what they are doing in Israel with Lang. Where is the news flow going to come from? These are the negatives. Of course the other side is a settlement with Google and a huge spike in price as a result (shorts contributing a large percentage of this). There is ambiguity as to how this will play out. It is prudent in my opinion to hedge this way. The smartest people get things wrong sometimes in how an event will play out. My strategy offers protection and allows for both scenarios. Once the decision is known it will come down to execution. A straight stock purchase can leave you in ecstasy or agony, which I fell is too risky given that Vringo does not have the rest of their business plan executed at this time. A year from now with these cases done there will protection on the balance sheet and with institutional support right now that is not the case.
Yes but the $9000 put option, for a $35,000 investment will be valuable if things get ugly. Also remember you can sell the option like a stock so if there is good news sell the option immediately(recoup what you can) and let the stock ride If there is bad news sell the stock immediately and let the put ride. It is peace of mind and its not for everyone but I am hedged this way as I have learned how the pros protect themselves when they are wrong.
Confirmation of Mark Cuban holdings in Vringo
http://www.sec.gov/Archives/edgar/data/1066154/000119312513045217/d481748dsc13ga.htm
This is Based on 80,328,144 shares of Common Stock of the issuer outstanding on November 14, 2012
His current holdings is 1,130,720 shares which is 1.4% of the shares o/s
OK Group One trading just reported the following trades in their 13-f filing.
Remember when this stock was tanking below $3.00? We were wondering who is buying these shares? Now we know that one of the big buyers was Group One trading LP. They put on a nice hedge on Vringo.
They purchased 332,374 shares at an average of $2.87, simultaneously they went into the options market I think it was the May options but I am guessing, anyway they bought the equivalent of 300,000 shares or 3000 call options and I believe they sold puts against it for a credit, 530,100 shares or 5300 put options. This is a bullish call because they own the stock outright and their options strategy will protect them if the stock goes down on an adverse ruling. The trade cost them about $300,000. On September 30 they owned 100,000 shares now they own 332,000
Buying Vringo and owning the equivalent dollar amount in a put option is a good strategy, I would use the May contract. So if you own 10,000 shares you need to buy 100 options to balance the position. If your average cost is $3.50 your shares cost $35,000 you can hedge the trade with $9000 in options.
Interesting strategy from one of the 13-f filers. I recommend doing the same. I have a similar strategy to protect my investment here. If anyone is interested I can into more detail.
you are going to need more institutional ownership for a ten bagger but it is doable ..
Thanks for the input I agree on the valuations.What I really like is that this move has not really generated any chatter on the message boards. I think when all the chips are played that is when "the common" speculator gets in and that will be the time to get out.
small position end of day yesterday, sold half today. I wish I had purchased more....
If you take a step back and look at it on a weekly basis you will note that it only closed higher on the spike week but even that is challenged if it closes above $3.10. The bullish move is intact.
I don't think so... IBD has had it it in their top ten for a while, most would have sold on the shakedown from $3.50 to $2.50. Last year they announced the big contract at the end of February will history repeat itself?
Since you have been in this since July, why do you think the stock moved so much with an explosion in volume?
Because I have been in and out of this stock in the last few weeks and have been watching the trading very closely. The trading today is very bullish. What I want to see is a break of $2.95 then it will test $3.00
Looks like good news leaking on GV...
http://www.streetinsider.com/13Gs/Mark+Cuban+Raises+Stake+in+Vringo%2C+Inc.+%28VRNG%29+to+1.41%25/8073849.html
In a 13G filing on Vringo, Inc. (AMEX: VRNG), active investor Mark Cuban disclosed a 1.41%, or 1,130,720 share, stake in the company.
This is up 9.70% from the 1,030,720 shares held as if April 2, 2012.
True but, no news that we know of yet is my take. Stocks don't take off like this without reason. Look at Dell it started going up on rumours and now we have the privatization news. I am not convinced that there is no news I am convinced that there is news yet to be made public, that they are working on contracts not yet consummated. They bought lots of extra equipment last year, insiders bought in November and the CEO said they are confident of signing new deals, to me it adds up to contracts coming, we shall see.
Maybe....the mm's control this very easily when they want to let it go it go up really fast or down, right now they are holding here but the volume is too low , lack of momentum and too many shares being sold at bid. So I will watch for now...$2.50 is a great support level if it gets there , I am not convinced though.
I exited my position. There is too much selling on bid and there is no momentum. I will put it back on watch list. This has provided me with several big gainers, maybe there is another one in the wings?
Market makers screwing with GV now. Lots of trades filled by them and not the market that's why it is not moving. For example last three trades 2,000 @ 2.7701, 8,000 @ 2.7999, 1,000 @ 2.7999, those are all trades that would have moved the price up but the mm filled it.
Looks like it's going the other way.
Actually 7,900 shares traded there but the mm filled it so the ask did not change.
I say GV takes a shot at $2.90 going into the close?
More than 30,000 was offered earlier $2.82 - $2.85.. I have seen big offers get taken out easily, I think there is a fund accumulating this.
first test zone coming up here, $2.92 - $2.94
Well the stock was $1.90 with volumes under 100,000 when the article was written. Since then it has gone to $3.58 and traded up to 2.5 million shares. As I said before stocks don't just move without a reason, there is always something and the general investing public is always the last to know.
What caused Jeffrey Eberwein to increase his holdings by 70% in late November?
Don't know if you saw this
The company stated the following in their Q3'12 PR: "With the strong team we have assembled, we believe we are well positioned to take advantage of future opportunities to build on our record growth." Their comment seems to indicate that they have plenty of additional growth ahead of them
This is my point, volume always preceeds news and I am guessing they are working on a large contract or two and this is what's driving the stock. The CEO mentioned that they are working on new contracts so my guess is we get some news soon before earnings. If not, your scenario is most likely accurate.
Good strategy this is usually how I trade also. With GV I am using a loose stop and also have a small core holding. Most of my shares are for trading. Today we have low volume which is the reason it is not higher, plus we have negative general markets.
With respect to GV, I see resistance around $2.94 - $2.95.. this is minor, more substantial resistance is at $3.00
thanks for the list researcher!
I agree there is resistance around $3.00 but overall considering the weak markets... this is very bullish.
Good luck with that... this is going higher, the increase in volume from average tells me there is some big news lurking. The stock is easily manipulated by the mm's which allows for excellent trading opportunities. Overall the direction is up. There is resistance at $3.0 a break through there should head higher....
The fact is that a month later they are still refuting the allegations and maintaining their stance. Toups has not resigned which would be the key resignation. I really don't want to get into any attack discussions here. As I said I have no position but in the interest of fairness posted the company's response which you guys conveniently omitted.
On January 28, 2013, Douglas Cole resigned from his position as an independent director of Longwei Petroleum Investment Holding Limited (the “Company”). Mr. Cole was Chairman of the Company’s audit committee and a member of the Company’s nominating and compensation committees.
The Company is attaching hereto as Exhibit 17.1 a copy of correspondence received from Mr. Cole in connection with his resignation. In Mr. Cole’s resignation letter, he states that the Company has refused to approve certain resolutions presented by the audit committee related to the Company’s response to certain allegations made by a third party. The Company disagrees with this assertion and is still in the process of determining, along with the input of the full board of directors, the best course to take in refuting the allegations made against the Company. The Company believes the allegations contain numerous errors of facts, misleading speculations and malicious interpretations of events. Nevertheless, in order to provide the highest level of transparency to its shareholders, the Company and its legal counsel in the U.S and the PRC, as well as its auditor are reviewing the allegations and management is cooperating with the review process. The Company intends to take further action to defend itself.
On January 30, 2013, Xue Xiaoping resigned from her position as an independent director of the Company. Ms. Xiaoping was a member of the Company’s audit, compensation and nominating committees. Ms. Xiaoping did not resign due to any disagreements with the Company. A copy of Ms. Xiaoping’s resignation letter is attached hereto as Exhibit 17.2.