Sure, let me give you a generalized example:
Let's say a company has 1000 shares of stock which today is $1.00. And you, an insider or warrant holder, want to sell an additional 100 shares. Let's look at the math.
If the company has been around $1.00 for a long time the average cost per share of retail can be assumed to be GREATER than $1.00. So, if the insider just decides to dump 100 extra shares into the float the price will crash people tend to sell in small downward moves and hold after drastic ones. Like I am down 10% panic, I am down 90% oh well it has to go up sort of mentality.
So what you do is you start to buy up shares in small chunks, hopefully as cheap as possible. As more people begin to sell, @ 0.95, 0.90, etc the float of the stock constricts. These weakening markets bring in shorts if not already there. Thought, stocks below $2.50 attract far fewer than above $2.50.
The cost of the shares being bought is BELOW $1.00 and anyone on retail holding still has a cost per share is GREATER than $1.00. So what you have are cheap shares < $1.00 and a float that is acting like there are fewer than 1000 shares and increased shorting.
This is why share liquidation schemes spike. When the stock spikes, retail seems to hold so as shorts cover dilution can occur. The shares bought at .90 or whatever can be held for weeks and just sold back at $1.00.
In order to really profit, the stock needs to move 250% for things like warrants as they are options priced usually. If you want to see this happen go back to APDN to 8 or just recently BLPH went 1.35 to 4.55 in a day.
When volume dries up flippers are pushed out as well, especially in a price restricted stock like APDN (i.e. 0.05 bid/ask) this further puts on downward pressure.
Can take... days.... or months.
