Grupo Resilient International Inc (GRUI)

[seeker777]

Jaykk, Market Akers are responsible to create and maintain a market in a company's stock. They do this by buying shares from those willing to sell, and selling shares to those wanting to buy. Because they rarely have enough stock of a given company in their own account to cover increased buying demand, they must borrow it fom another source in order to fulfill buying orders. This causes them to be short. Normally it's no big deal, but when you get a situation like HISC, there are tweo things working against the MM's. One, they wind up becoming very short just to meet demand. Two, because there will be a stock dividend to HISC stockholders on May 30, and because all shares must be accounted for so HISC knows who is entitled to receive the dividend, the MM's cannot be short. So, they are forced to cover, or buy back all the shars they are short. This greatly increases demnand for the stock, and if there aren't enough willing sellers, the MM's must up the price until they get enough willing sellers. Thus, the expectation of a much higher PPS. Couple this with HISC's prospects and longs who are not going to sell below a much higher PPS only adds fuel to the fire driving the PPS up. Now since the MM's still have a month or so to cover, the rise will start off slow, but the closer we get to the dividend rate the more frantic the buying may become, depending on further news releases from HISC, which will be significant. Right now this stock is traded amongst a relatively small universe of investors. As more and more people get wind of this, more and more fuel goes in the fire, more and more pressure on the MM's to fill orders, more and more need to cover the short position. This is the simple version and I hope it helps answer your question. Put another way, fasten your seatbelts. LOL
Cheers