A winning strategy with the RNVA dilution
Understand how MMs work to develop a winning strategy.
Is RNVA a high risk stock? Of course it is.
What is the highest risk to RNVA in the short and long term?
Short term risk (under 12 months) the greatest risk is capitalization as revenues stabilize. The debt load will probably require restructuring during the next 6 months. Due to financial difficulties over the previous 18 months RNVA took on debt structures that would make a mafia chief proud. Of course the debt has been passed through to RNVA shareholders which is precisely why we now see the full impact of dilution.
Shareholders weakest point is a lack of any organized tactics designed to minimize dilution. This is probably because many shareholders do not understand how MM dilutors work.
As long as retail shareholders will continue buying MMs will continue walking down PPS until each progressive level volume drops.
When lenders convert shares and sell them to MMs it is at extremely high discounts. Anyone that does not understand this only needs to actually read the various notes, conversions, exchange agreements and warrants.
So how to minimize the MM tactics during dilution.
Remember MMs supposedly create liquidity. They do but not like you might think. If MMs walk down PPS by selling into the bid the logic is MMs CAN AFFORD to walk PPS all the way down to their actual cost plus profits price.(the amount they paid). Retail shareholders see this as constantly dropping in PPS.
Conversely, MMs will also raise PPS incremently to entice increased retail buying then again sell into the bid.
My personal favorite tactic is a very simple one.
Dont buy in to their tactics. Take control away from MMs buy target price reductions. For example, if the MM open at .004 during a dilution cycle (example only), set GTC LIMIT BUY ORDERS at 50% of the open price. If MMs walk PPS down to trigger the gtc limit orders then before the order triggers cancel the initial order and reduce pps by another 50 percent. If this pattern is continuous you should expect to see volume sharply decline for a couple trading days followed by MMs changing tactics to increase PPS. NOW CHANGE YOUR TACTICS. SET GTC LIMIT BUY ORDERS 50 percent higher than the open price then when MMs walk up the price cancel or edit the limit order up another 50 percent.
GLTA
