You have to understand how start up / OTC companies grow.
They need capital with normally little or no assets to back a bank loan. So they have to go to the Venture Capital market for funding. Also known as angle investors.
Now allot of what I'm about to post isn't within a VC's operating structure documents. But It's how big money makes big money.
Since maybe 1 in 1000 start ups succeed, when a Venture Capital firm make a loan deal. They really expect the loan is a bad loan which the start up will not be able to payoff over the life of the contract. So they are issued shares from the company as collateral. Shares obtained become an angle investors assets to base any gain/loss risk, just like a bank needs.
Now if you loan someone money which the odds are will rarely be paid back. How can you make any profit from that investment. For a VC all they have is a promise & stock. The stock becomes their prime profit center for any start up funding. Not the 8 or 10% interest charged.
This tells me they not only want the stock price to rise, so they can sell it for their loan profit. But they become the BIG GUY seen on the OTC open market, who wants and causes that price rise.
It's a excepted fact about trading stock (big boards or OTC) if one hold 10% of the average daily trading volume, they can make trade orders which will drive price. That's 10% of average daily volume, not OS. And most funding deals cap is for 10% of the OS. Allowing the VC the POWER to manipulate price any time the care too.
So if the VC wants profits, all they need to do is invest a little extra over the loan value and buy the ask at well timed intervals. And cause the emotional retail to buy the run. That's what retail does. BUY RUNS. Then sell their large holding to feed that emotion buying at profits, as the buying comes in.
SO here's your answer.
1st; I wanted to play CDNL because I found 300 mil potential shares ready to be sold higher, by VC funders. And part 2; when shares are bought back, the company can do 2 things. Put them back into the A/S authorized inventory or cancel them out completely.
I must add. While all this gave me a reason to expect a large fast manipulated run for profits by VC's It has NOT happened at CDNL. CDNL is trading with out any major manipulation. Only M&Ms trying to get as much trade close fees as possible. M&Ms don't create volume, so in this case, they are just chasing it.
But if a large individual shareholder was wanting to sell higher they (Market Makers) would see the tell tail large bid/ask stacks when VCs are involved. And help drive price the way the VC stacks the bid/ask during a move.
It's the difference of seeing 3% daily volume to 10% or more of the O/S being traded daily. Large volume + large day traders and VCs selling. Also equals large volatility & continuing flag pattern runs; which we are NOT seeing.
AI
