This is how I see it happening with a group like AUTO. Someone comes to them and says they want to sell a large block of shares. They agree to let AUTO sell them using their algo trading systems which AUTO can setup to sell a certain number of shares in a certain period of time. This is the business AUTO is in or at least part of what they do.
I don't know if the following is exactly what happens, it is largely speculation, but it seems to fit most of what I have read from various sources...
So AUTO sells a bunch of shares during the day as legitimate looking trades and come end of day they 'buy' those shares from their client at a predetermined discount as one lump transaction, which we see as the form T trade. That is why they are usually always lower than the normal trading range for the day and how AUTO gets paid for their services. So that accounting trade at the end of the day is the one folks are saying is not a 'real trade'. However the shares dumped during the day are the ones that end up suppressing the share price.
Similar 'not real' trades happen quite often on certain days. Frequently we see lots of 'mirror' trades go through where every trade amount is posted twice at two different prices as if the sell to you and the buy from someone else were being posted separately. I have no idea why they choose to post them like that on some days and not on others. Perhaps it depends on whether or not the buyer and seller are using the same broker or more likely they do it to suite their own agenda. (It seems to me we see more of this when we are 'free trading' and not being dumped on by an MM.) Anyway, I don't think mirror trades are the same as what happens with AUTO, just another example of double posting what is really a single transaction.
So, some here are trying to imply that it is Hemi that is ultimately providing these shares to AUTO. Others, like BigMur, are saying that some other entity is having AUTO do this for them and aren't really providing them any shares, but rather 'air shares' are being used which classifies it as naked shorting.
IMO, from what I have seen over the past few years in the penny market is that both scenarios play out continuously across the pinksheets. It is really as ugly as the conspiracy theorists say it is. On the other hand most of the bad guys on the pinksheets are the CEOs themselves. So you either have the MMs doing it or the CEO doing it and the share price ends up in the toilet. Not only that, but places like AUTO can just as easily adjust their algorithms not to get the most money for the shares, but to deliberately bring down the share price. Fun, huh?
So which is it with Hemi? Well Keith adamantly denies it is the company. The opinions on the board are abundant and don't need re-iterating by me. I just wanted to clarify a little why many don't consider the AH trades a 'real trade'. If anyone has more insight on the AUTO's exact M.O. I'd love to hear about it.
AI
