Have been reading and doing a bit of research on a bit about the possible short selling in Berlin.
What I understand (if i am correct) is that the shares get ramped in Europe by the issuer once they have aquired a fair size quanity of stock in the target company in the US, they then issue shares in Berlin at a much higer ratio, holding onto a fair size chunk.
They then proceed to unload these new shares into the market, buyers flood in, in the hope of making a killing having suggested a target price of say $1. When the market becomes aware of the prospects of the company(which in this case are outstanding, as big orders are flooding in from the new sales team) the price starts climbing.
When the stock reaches say 80 cents and the European market starts buying in volume they start to unload the large volume that they retained (nice profit). They then sell the US stock at a nice profit again that drops the price and panics sellers. During this time they are shorting it to high hell in Europe. The price drops like a stone...they buy it back at a a few cents..square the books..sit on a huge profit at European investors cost.
At least thats what I can understand of it. If I am wrong please correct me.
Having stopped the scam they might have been selling back into the market, hence the price dropping back in the hope of buying back the stock they have already sold in Berlin on the cheap, if they are unable to they will soon have to buy to cover the shortage, in fact they may have sold out at around the 18-20 cents and be buying back now. Just my view,but please correct me if I am talking rubbish.
