Crcook, while the HFT manipulation itself is extremely in-your-face and evident on level 2, there is no way to know who exactly is responsible. But Catt's guess that it is Adage, or a cartel led of short hedge funds led by Adage, is highly plausible.
I have a theory on what they hope to achieve. This is no conspiracy theory, just a plausible deduction.
- Adage must have known about the patient death that they suspected would result in a clinical hold (which did happen on October 2, 2015) and started shorting in July 2015. It is very easy for these hedge funds to get inside info about the companies they invest in.
- They must have expected to cover their short positions either using retail long shares that would be harnessed from the SP drop over the next several months following the hold or by getting ADXS to issue them shares at a pre-determined price in a dilution.
- The former option is a relentless work-in progress and the latter (ADXS dilution) has never happened at a volume that would have allowed them to really cover. Recall that Adage had filed an FTC form to allow them to acquire far more than 19% of the company in July or August of 2015. This never came about and the boot on the SP was quite possibly a ploy to get DOC to relent and issue them new shares so they could finally cover, especially as retail share fishing has proved to be very difficult.
- I expect Adage and other short funds to eventually be forced to cover from their box of long shares (less likely) or come to an agreement with ADXS to issue them new shares shortly before a buyout or a massive partnership for EU distribution. In return ADXS might get a commitment to finally and permanently remove the boot from the SP and float freely. The non-hedge funds shorts will then be roasted and served and dinner for all longs - hedges and retail.
Am I a 100% sure about this? No, but I think it is very likely if you reverse engineer it from the incessant manipulation observed on level 2.
