To further expand on what's happening...this is just my opinion based on observations and experience and will be a loooooong winded post!
Initially when MJTK took off, what I believe fueled the intense move was a combination of fantastic exposure from Sleek's recommendation and short positions having to get covered as the price ran away from the market makers.
To understand this, I need to explain how shorting works with a simpler explanation. Imagine your friend has a pair of cool sunglasses and you borrow them. Then someone else sees you wearing these borrowed sunglasses and asks to buy them from you for $50. You sell them, search hard and find the same pair at a store for $45 and pocket the extra $5. Then your friend asks for the sunglasses back and you return the new pair you just bought. You've just made $5. That was a successful "short position" trade. However, imagine the same scenario, but when you sell the sunglasses for $50, the very next hour Kim Kardashian is seen wearing these sunglasses. Now when you go out to find the same pair of sunglasses, you have to pay a lot more than $50 because all the stores are charging more for this new hot item. Plus, there's no guarantee they will even be in stock because suddenly everyone is rushing to buy these hot sunglasses. Now your friend asks for them back and you're forced to pay a much higher price so you can return the sunglasses to your friend. Finally you have to pay $75 for the same pair of sunglasses that you sold for $50 and you're down $25.
Now filling in with shares of stock instead of sunglasses....
Take the above scenario and substitute shares of stock, multiplied by millions of times over and this is what happened to push MJTK stock price higher as market makers pushed their way in line, competing with retail traders doing the same thing, to buy whatever shares they could, no matter what the cost.
They've ended up down a ton of money as they chased to cover, and now they're trying to duplicate this same process, by continually borrowing from others, selling them, and then trying to buy the exact replacement for less money, until they've pocketed enough to recover their losses and built up an inventory of shares again. Perhaps their losses are in the hundreds of thousands of dollars and their still short millions of shares. Each time they succeed in recovering some of their losses, they're only making $200 here, $500 there, etc. etc. etc. It could take a long time to get back to even, in addition to replenishing their supply of shares. So market makers keep borrowing, and borrowing...all while pushing the price down to try and recover losses little by little, and replenish inventory of shares.
For example, they're selling 1 million borrowed shares of MJTK at .007, then working to buy them back at .0068 to pocket the difference. In this case, they've made $200. They keep putting borrowed shares up for sale, buyers grab them because they think they're a bargain. Meanwhile, the market markets will just put up another 1 million borrowed shares at .0069 and work to buy them back at .0067. Repeat this process over and over. Throughout this entire process (that they're successfully doing), retail traders panic and dump their shares into the bids, which are actually the market makers covering their short position. This is why you see a lot of shares being absorbed at the bid price.
This is the current scenario MJTK is trading in. Market makers have to replenish their inventory and recover any losses they had from when the stock first took off. And it's working because a lot of traders are selling their positions, rather holding tight and making it harder for the market makers to replenish their inventory and recover losses.
The hope going forward is that retailers are buying and holding some of the shares that are getting dumped, and doing so in larger rations than the market makers are, making it ever more difficult to squeeze any shares out. When this finally comes to an epic standstill, this is when the float is held tightly enough, or market makers have replenished enough inventory and recovered enough losses, that the stock price can move back up.
When the standstill occurs:
A - If the stock price moves up quickly like it originally did, then we have a float lock and market makers will be sent into a frenzy again, rushing to buy at whatever prices they can to cover short positions they've created for themselves, as they worked to try and recoup losses and replenish inventory.
B - If the stock price moves in a more organized and orderly fashion, then the market makers have successfully replenished inventory and recovered losses from the initial boom.
Either way, something has to give eventually and there is time since this is a 4/20 dated stock. No one knows how long this current scenario will play out, but in the coming days and weeks, there will definitely be catalysts (MJTK didn't go through all of this balancing of their books and dilutive activity all for nothing, you can bet there will be some big time news that the company will issue about Citizen Toek, etc.) that will drive the stock price higher, either in a slow and steady fashion, or another fast and furious rip as explained in A and B above.
The numbers I used above are purely for the purposes of an example and don't necessarily reflect exact values and price actions.
Do you have the patience to see this play out? Or will you get impatient and sell your position? If you sell your position, I wouldn't recommend looking back at a later date to see how it played out, because I still believe MJTK will make a big move to the upside, and one will kick themselves for not holding.
Go MJTK
Rec
AI
