Yes, there are new owners of those shares -- retail traders. You hear this often when people try to downplay large-scale dilution -- i.e., that "dilution doesn't effect PPS" or some variant -- or don't understand why it's so destructive to a ticker.
It is true that someone was buying all those shares. Of course, this is subject to the double-reporting phenomenon that BigBake explained last night. That is, actual volume can be closer to 50% of what it looks like from the tape, because the diluting broker (e.g., VFIN) first sells blocks of shares as a short position and then covers/closes that position by buying those shares at a discount from the company/insider block that was put up for sale. That's what gets reported as "short volume" in those reports and misconstrued by some as "short interest," when in fact those short positions were closed either later in the trading session or afterward in a t-trade that same day. The MM's almost always just take their 1.5% commission and have no risk (i.e. no shares, no short positions) at the end of the day.
Anyways, your point is still valid that LOTS of shares were bought today. However, those shares are now no longer in the hands of the company or an insider/affiliate with large holdings. Rather, they are spread out now among dozens/hundreds of investors in the overall market, and those investors for the most part are not holding for the long haul. Practically speaking, that means that there are just that many shares out there that will be put up for sale every tick the PPS rises, so it takes that much more buying pressure for the PPS to continue to rise.
In other words, those hundreds of millions of shares that were sold in the .0018-.0025 range are now no longer consolidated in the hands of a single investor/insider who is holding them out of the float. They are now spread out among a bunch of people who are probably looking for 3- 5- 7- or maybe 10-tick gains. All those shares are now essentially stacking the ask at .0021 up to .0035 or so, and in order for the PPS to break into the .0030s and higher, almost all of those shares are going to have to get bought up AGAIN by people willing to pay higher prices for them. And then THOSE people will probably want to sell those shares again another few ticks higher as well. Hence, resistance points on charts.
For most subpennies, I think the way around this problem, what leads to big runs, is often the result of a group of true "longs" who have agreed to hold for higher PPS levels accumulating tens of millions of shares apiece (i.e., "locking up the float"). This causes a shortage of shares when buying interest spikes due to good news, and the PPS skyrockets.
What we have happening here, then, is basically the exact opposite of that phenomenon. When longs liquidate their holdings and leave (also just saw this recently on CW&R, and I think that's what happened today on S33K when a 30 million share sell order hit the market all at once and cleared out 14 million shares worth of bid support, including several MM's). Same thing when a company sells too many shares, or an insider dumps tens/hundreds of millions of shares that he got for .0001 or .0005 or whatever onto the market in a short time. Point is, it's not good, and recovery here is looking less and less likely even if product is launched.
AI
