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Guess VPIG wasn't the only stock targeted by predatory short sharks...FNMA -63% from $5.40 to $2.00. Only difference is VPIG is going to be the next TSLA - Tesla Motors.
And you have made some good points, as well; including your reference to the relatively small percentage of short interest. However, you need to scrutinize an institution's portfolio framework, not just their position in VPIG. One must consider VPIG's role in an optimized portfolio of shorts. In this case, you must take into account the expected returns of the individual securities, the standard deviation of those returns, the correlations between them, as well as the firms tolerance for risk. So, there is a high probability there is a fund(s) leaning on a portfolio of shorts in which VPIG is a part of.
Another issue that arises with regard to portfolios with short positions, is the leverage involved. Leverage introduces risks that are distinct from the risk captured by a volatility measure. These include the possibility of losses beyond the capital invested and the potential for margin calls, which may necessitate forced buying; perhaps at adverse prices. On the other hand, if the portfolio is doing well as a whole and their value-at-risk is at acceptable levels, they can withstand a squeeze in an individual stock almost indefinitely. Which is why we continue to see the short interest in VPIG grow as the market moves higher.
BTW: Don't you sleep?
I am going to take the liberty and make the assumption that the sell-off was (in part) caused by end-of-the-month profit-taking, and EOM manipulative short selling. Short interest has been growing as SP has rallied, and institutional funds’ portfolios are closely related to market-wide short interest, and in turn, their convex pay structure incentivizes them to "mark down" the stock.
I'm not aware of any calendar effect or seasonal tendency in returns for OTCBB stocks after 3-day weekends, so VPIG's failure to produce a positive return today, should not be predictive of future returns. That being said, people tend to view price they're used to as normal, and prices removed from that level as under or overpriced. This perspective leads people to trade counter to an emerging trend on the assumption that prices will eventually return to "normal" and it causes them to abbreviate trend-following trades.
While its hard to distinguish the initial end-of-a-trend from a random move, a one day sell-off does not qualify the discounting of a much higher expected gain. So, just like in life, its OK to marry a winner; you just don't want to marry a loser. Remember, people tend to focus on the few broad outcomes that appear most probable and ignore the low-probability scenarios. But it is the moves you don't expect, that are often the most profitable. VPIG's share price may just be shoved up the shorts' collective keisters, just as easily as they tried to shove it down shareholders' throats.
For now the stock is merely a plaything for the MM's algorithms i.e, selling it against the VWAP@0.37 and buying it @-2SD away @0.27, but stepping it lower, nevertheless.
For those of you who are itching to take your profit. Its always easier to find an excuse for getting out of your winners, than for getting out of your losers. At times, the best next trade, is simply staying in the current trade. Which is why a trader needs a decision process for managing the expectation or expected value of the trade as well as the equity. What matters, I think, is the expected value of the trade at each moment, and balancing that against equity and a margin of error to ensure, "staying in the game".
You're welcome! Please, take our advice for what its worth - asking the DR and I where VPIG is headed, is kind-of-like asking the barber if you need a haircut.
Under the new NasdaqCM requirements, a stock can qualify for listing if it closes at $3 or above for at least five consecutive business days prior to approval, which means that VPIG would qualify for the move near the end of next week.
According to a recent NASDAQ study, OTC companies upgrading to NASDAQ had an average 3 month average daily volume of 59,509 shares prior to uplisting compared to 137,905 shares after uplisting. I was unable to find any empirical data on returns after up-listing. Anecdotally speaking, I have seen some large spikes higher in SP after OTC companies uplisted, but these are random data points, that are not persistent over time nor robust to different market conditions.
Moving up the food chain would increase VPIG’s visibility with institutional investors as well as drive liquidity, but will also make the stock more vulnerable to attacks from predatory short sellers. Nevertheless, I agree in principle, with the good Dr Key - insiders appear to have a vise grip on the stock...for now. If in doubt or feeling trigger happy though, you can always scale out of your position 25% at a time, at predetermined levels on an attendant rally.
That may or may not be the case, but I don't think you'll see much profit-taking if it is, unless there is some kind of "Prisoner's Dilemma" scenario, that plays out. These guys have BBs after their names not MMs - they don't need the money! Why sell at $3 when you can sell at $13 or $23. In our case, greed is good!
It seems clear the insiders are motivated to inflate the price (Dr. Key) - That's it; that's what is driving price and that's all that matters, for now.
There are indications that are suggestive that global warming may be taking place, but it is far from having been proven to be true; but of course, we digress.
It's also been in the 90's the past few days where I live; unseasonably warm one might say - so is this proof that we're experiencing global warming, or is the recent rise in temperature simply a random variation. If we hit a cold spell the next few days, will that disprove the global warming claim? The variances are probably infinite and it would probably take a lifetime to either prove or disprove.
Do you realize how many "bearish" candles, bearish formations, and bearish indicator readings there were, on the way up from a buck, yet we're over $3.00? Yet you're going to single out one candle and say that's the reason the market is higher. You're not giving all data points equal weight. It's an absurd and certainly a biased assumption. Believe me, at any given point in time, I can give you an equally compelling (technical) bull or bear argument, by simply discounting one, and focusing on the other.
This stock is still relatively illiquid, which means there are not a sufficient number of diverse players interacting, i.e., large day-traders, arbs, institutional traders, funds, HFTs, program traders, etc., who might be predicating trades based on technical or quantitative factors. Instead the stock is very closely held by a small number of shareholders comprised of some very large deep-pocketed investors, some small retail investors , and the MMs, who take the other side of their orders and whose decisions are essentially made by risk algorithms.
Now, I’ll give you one guess as to what or whom is driving price on this current rally, and then I’ll leave it up to your imagination, as to why.
No way of knowing for sure, but it looked like retail brokers were heavily offered and doing the selling. However, a great deal of retail-customer orders are filled by wholesale market makers that pay brokerages to trade against the orders, or they are just filled internally. Really difficult to tell nowadays just from Level 2. The real question is who is left to support the stock. Do they have any carrots to dangle in front of investors that would convince them it was in their joint interest to buy the stock. Like I said in a previous post, if there was any real demand for Cryoport's product, don't you think you would have seen it already?
Back into the mid 0.020's I'm afraid, surprised to see there are willing buyers to take the other side of the puke - most likely MM's covering their shorts.
LOL...haven't heard that one in a while!!! Don't be so sensitive, the stock is going to the moon, and we're all going to make a bunch of moolah.
And the "Johnny Cash Finger" right back at ya! As always, you are a bit confused, which is not surprising after reading some of your past posts. It appears to be a habitual problem. BTW: It was malamutus who covered his position lower, not me. I have always advocated staying long , and adding to the position.
Just want to point out that a 100% (Fibonacci Extension) symmetrical move of the rally from the November 2011 low of 0.41 cents to the May 2012 swing high of $2.50, measured from the December 2012 low of .090 cents is $3.00, and not a multiple of +6X from that .90 cent low. However, $4.30 is in fact a 161.8% extension. Most traders use Fibs along with other indicators to determine possible targets.
That being said, I see no rational reason why the past move from $0.41 to $2.50 would have any bearing on the minimum measuring implication of the current move, especially when you consider how closely held the stock is, and the lack of institutional and large retail participation ( who could actually fulfill such a prophecy through their actions). If SP were to go to $4.30-$4.50 or higher on this move, it would NOT be because of some kind of imagined cyclical component in price data attributed to the previous move.
The only relationship the current rally has to the past rally either technically or fundamentally, is that buying is causing share price to go higher.
I dare say you are doing the right thing. Two of the cardinal sins of investing are giving losses too much rope and taking profits prematurely. They are both attempts to make current positions more likely to succeed, to the severe detriment of long term performance. The problem is that human nature does not operate to maximize gain, but to maximize the chance of gain. You're doing the right thing by looking for a higher expected gain. The real risk is out of the trade - why shouldn't you play with your winner?
If there was any real demand for the product, don't you think it would have been manifested by now?
Definitely some short-covering on the last burst higher. With the broader markets making new highs everyday, the Fed announcement due to tomorrow, a growing short interest in the stock, and the recent move higher in VPIG's share price, highly leveraged shorts were undoubtedly feeling the pain on a portfolio-wide basis, and were left with no choice, but to pay up. However, this could lead to a climactic mean reversion, albeit, only temporarily.
Wasn't trying to bust your chops, "athletica" - we're all on the same team here ( if one owns the stock). Just trying to point out that if a "friend" shares "material information" with you before it has been made public, it would not be wise, to share that same information on a message board. Believe me, you won't be laughing-out-loud, if the SEC catches you acting on that information, and I doubt your friend will be laughing either.
The past 2 trading sessions have finally witnessed SP make a move to upside of the same magnitude and with the same velocity, that is usually reserved for corrections in the stock. Which just-goes-to-show-you, how price action is so path dependent. You can have the best insights, and make the best trades, but if you do it this week versus next week the whole thing is different. Which is why I am always trying to understand how the players are positioned and who is driving price.
Last Friday the sellers; retail (ATDF), institutional (ARCA), and MMs (CSTI) failed to show up, or if some did stop by, they offered little resistance. It only took 50,000 shares to close the stock 0.15 cents higher. Today, the aforementioned sellers made an appearance, but were overwhelmed by the buyers, and finally had to back away. The historical high was taken out, but there is nothing magical about that price, which is a polite way of saying only a contrarian, i.e., an idiot, would be short this stock.
Ceteris paribas, the stock is going higher...and most likely, faster and sooner, than I had envisioned.
Heavily shorted stocks with small market caps, low price, low dollar volume and low liquidity, statistically have abnormally low future returns. However, I wouldn't qualify VPIG as a "heavily" shorted stock quite yet, although the short interest is growing. The shorts are now, most likely "valuation motivated" sellers who view the stock as mispriced/overvalued and who will continue to short the stock as it rises above fair value. And, if SP continues to simply grind higher ( and not "ramp" higher), the odds of a short squeeze diminish. A short squeeze would require a special day, i.e, a major announcement and a gap-up in the stock , combined with a major day up in the broader markets, (especially the small caps), along with a higher short interest in the stock, to really rattle the shorts' cages. Nevertheless, squeeze or not, VPIG's a ~$3.00 stock by the middle of August.
I'm extremely bullish the stock and very long. In no way do I side with the shorts. Nevertheless, I can't deny their existence or fail to recognize their impact as a driver of price, just as we recognize the buyers who drive price.
Google, Apple, Facebook, Paypal and a myriad of other mega-successful companies all experienced the same revenue generation, or lack thereof, when they were in the development stage. That’s why they are called “development stage” companies. BTW: Instagram was bought for $1 billion and had zero revenue, as was the case with the acquisition of YouTube.
Startups aren’t supposed to be revenue machines right away; at first they’re designed as “business model” experiments. In fact, revenue doesn’t actually matter for finding hot early stage startups, because "revenue" is a “lagging indicator” of success.
Investors will have already missed the window of massive upside that comes with getting in before the company starts to generate revenue and /or profitability. The idea is to speculate intelligently, and invest early enough to capture the bulk of the growth curve that comes with getting in while the company is pre-rev.
By the time a startup has a predictable and steadily growing revenue stream, it has built a product and brought it to market successfully, so the risk of investing in it has gone down tremendously and so has the reward. In VPIG’s case, it will probably be trading at $5.00 and be on the verge of being acquired by the time it starts reaching revenue milestones.
Bullish Haramis are found at the end of down-moves and are a reversal signal, not a continuation signal. Friday's candle engulfed an inverted hammer, which if anything would be construed as bearish by traditional candlestick analysts.
Short interest increased ,once again, by 16%, from 530,200 to 616,000 shares, which is not surprising, considering VPIG'S volume, market cap, and history of failing from these levels.
VPIG has closed higher on the week on only 2 occasions prior to last week's close. So, it boils down to how strong are the hands that have been driving the recent price move. Because, the minute they fail to sustain the buying pressure, is when the shorts will pull liquidity and slam the market. On the other hand, they can ramp-up the stock and squeeze the shorts into submission.
In either case, it won't be the result of any particular candlestick print.
Indeed it does! - "Kind of makes sense to uplist " But what you said; doesn't make sense. New appointments and 8K filings wouldn't have anything to do with signaling that kind of event. Perhaps explaining, that in Rodman and Renshaws coverage of VPIG from 06/25/2012, they mentioned a possible catalyst for the stock would be a "potential NASDAQ up-listing", or that it was a prudent strategy for nascent companies to up-list after reaching certain SP milestones - might make sense. But, what certainly doesn't make sense; is disseminating proprietary information (if it is indeed valid) on a public forum.
Not saying the stock isn't going to trade higher, but I'm just curious as to what your technical "buy" signal was. VPIG closed at a recent high;which in the anachronistic world of traditional technical analysis would be a cliché-d double-top. Which I guess is better, than VPIG having made a new-high-close, because then we would have to be concerned with the sell-the-new-high algos, kicking in. Once again, I'm not saying the stock isn't going higher, but "technically speaking", it's probably over-extended, being +2SD out from the VWAP; and a pull-back to the high volume node at $2.16 probably wouldn't hurt. This of course, would probably mean something if this was a "technical trade", and price was actually driven by large retail and institutional traders who looked at charts and who actually gave a shit about all this. But, I seriously doubt that what is driving price at the moment Whomever, is supporting the stock is buying because they have a fundamental belief in the inevitability of the adoption Piggy's product,and the inevitability of management to execute its business model. Nothing to do with the charts...really.
Recent press release confirms Piggy's product is being readily adopted and diffused into the marketplace. Forward looking investors recognize this reality and are supporting the stock. From the standpoint of competitiveness and the potential capture of value, established companies like Facebook, and new entrants like Virtual Piggy, are leveraging data driven strategies, to innovate, compete, and capture value. With every new subscriber Piggy's data base grows, and along with it, the company's valuation. With large, established companies focused on continually increasing profitability, this does indeed make Piggy a logical target for acquisition in the future.
Thursday's 13% sell-off on 293K shares was not only generated by profit taking but by attendant short selling, as VPIG's short interest increased by 16% to 530,200 shares from the previous 455,000 shares. This is seems like a conservative number for a stock with a mid-range trading volume and mid-range market cap, that is currently trading near it's historical highs. VPIG's recent over-performance may explain why short sellers were not more aggressive.
As "malamutus" remarked in a previous post, markets always exhibit greater volatility and velocity when they correct. Abnormal selling creates a temporary liquidity crisis as market makers/algos, pull liquidity and/or b/a spreads widen, which can exacerbate the sell-off. This kind of price action does not necessarily reflect that short sellers are better informed traders,i.e, selling ahead of negative news yet to be released (unless it is insiders doing the selling). Instead, this kind of short selling is highly manipulative and is meant to shake the "weak hands" out of their positions.
Even though share price may have temporarily lost momentum, I do not believe that Thursday's price action is predictive, as there have not been any changes in the fundamental expectations of the company, On the contrary, I thinks this correction provides an opportunity to add to an existing position, or initiate a new position. Hopefully, the bulls will step-up-to-the-plate and do exactly that, before the shorts become too emboldened and decide to press their shorts.
Volume is light so the sell-off doesn't appear to be entirely profit taking. To be expected especially in thinly traded OTCBB stocks when the buying dries up. Market makers will seize the moment and quickly press their shorts or simply pull liquidity and allow the market to cascade lower. Markets can't go up forever and always experience some reversion back to the mean, in VPIG's case the VWAP is $1.91. Hopefully, value buyers step in before that, and the bulls re-assert themselves; otherwise the market could test top of value @$1.69.
I would imagine the next Q would be coming out in the middle of May, but you can check with Investors Relations to find out a definite date. Whenever, it is released, it may or may not have an impact on share price. It all depends on what is stated in the report, and whether or not its been priced into the market. In other words, if there is good news, but the SP has already rallied considerably, there could be a buy-the-rumor-sell-the fact type of reaction, where the weak hands take profits and the MM's press their shorts. Or nothing may happen to share price. The company and it's stock, are of course, inextricably correlated, but not necessarily, positively correlated, at all times. Which is why, I don't try to anticipate what will be said in the report, especially at this stage in the company's growth cycle.
Every start-up has a great story, which is always based on conjecture. So, I treat investing/trading as a probabilistic endeavor. I try to make good decisions based on the highest probability of success; predicated by price action and governed by good money management. Stocks go up for one reason; because there is buying. As soon a the buying stops, SP goes down. And, it doesn't necessarily have anything to do with what's transpiring at the company level. Buying will often dry up, because everyone who wants to own the stock has already bought it. Which is why its important, that new buyers, especially institutional buyers, continually flow into the market. This is what supports and drives share price; and as long as this continues to be manifested, SP will go up.
I am in total agreement with “malamutus’s” assessment of the company and it’s prospects going forward. Nevertheless, there are still inherent risks to this company at its current stage of commercialization. While Piggy’s product is being adopted, it still needs to be fully diffused into the marketplace; revenues generated and then scaled. For now, Piggy maintains a competitive advantage, and management appears to be executing it’s business plan, making all the right decisions and hiring all the right people. So, the future does indeed look bright.
Of course, this really has nothing to do with what is driving price, at the moment. Reality is that an overwhelming share of trading activity is based on short-run price forecasts rather than fundamental research. In other words, how can one track changes in the fundamental value of income streams to which assets give title, when there aren't any revenues.
Which is why we need to scrutinize recent price action. During a week when the broader markets were down 3%, VPIG posted a 16% gain. In my opinion, that’s either large retail buying or institutional buying coming into the stock. Dumb money follows the herd, and the herd was selling last week. It appears there is a significant “bid” or an “unacknowledged put” below the market, which should remove all doubt as to where the stock is headed.
Investors should be pressing their position and even adding judiciously. All too often, inexperienced investors take profits quickly and hold their losers, even averaging down as the market goes against them. The prudent investor, “plays” with his winners and not his losers.
Still 455K shorts in the market (at last count). With the stock trading at over +2SD from the VWAP, it won't be long until the risk algos kick-in. Could very well see a quick squeeze up to the $2.11 level.
Whatever Zacks is quoted as stating, is essentially meaningless. Zack's is almost inevitably near the bottom of the StarMine Accuracy scores.
The addition of Rathman may or may not be a "big addition". Everybody thought Larry was the messiah when he replaced PB, and look what happened. Rathman is only a Board member; it's unclear as to the scope of his involvement in the company.
There have been a multitude of mistakes and mis-steps made throughout Cryoport's history, but it still boils down to the fact that the technology has not been embraced by the end user, especially to the degree that investors thought it would be.
It's actually quite puzzling, because it seemed like a no-brainer for shippers to make the switch from dry ice to dry vapor. Throw in the support of Fed-Ex, and an investment in Cryoport appeared to make all the sense in the world.
Of course technology adoption is highly subjective to the type of users and the innovation-decision process. And, even if some users adopt the new tech, it is not guaranteed that the innovation will spread to other users. In the end, it may or may not be the fault of the sales and marketing teams, but it is certainly one of the first areas that should be scrutinized.
For now, CYRX (the stock) is not in play. It's attendant price action is fully governed by the market-makers in the stock. The one area where Rathman may prove to be invaluable, is bringing in large retail investors to both support the stock, and ramp it up over the $2.00 level, where the stock can be up-listed to a senior exchange. Only then will small cap funds and institutional investors be able to fully participate.
To quote Winston Wolfe in Pulp Fiction...
That's correct Johnny. VPIG is giving the broader markets the "Johnny Cash Finger". Up over 3% while the markets are down 2%. Incredible relative strength to the market - price action is indicating VPIG is going to trade higher. Stock is held by very strong hands, so profit taking should not be a factor. MM's would be wise not to short this stock; because pigs really can fly!
http://iconicphotos.wordpress.com/2009/08/22/johnny-cashs-finger/