Wednesday, September 08, 2010 12:50:58 PM
That's the thing, with the complete lack of volume it's actually pretty easy to play with the pps. Some of the pro day traders out there sometimes take advantage of this to keep hammering the price down to try to create a psychological cascading effect to discourage other shareholders and get them to sell.
For example right now for SPKL, the ask is 5 cents and the bid is 4.5 cents: you could enter a sell order for 4.6 cents and then enter a buy order at that price (from 2 different accounts, but you might not even need 2 accounts). All of a sudden it looks like SPKL went down another 8%, even if you just spent 20 bucks (including your trade fees) ... If you are the guy sitting at 4.5 cents with a large buy order, you stand a good chance to get one or more people to decide to throw the towel and get out. It's a pretty common tactic and it does work. Add to this posting negative crap day in and day out on the boards where the stock is being discussed, and you can get some traction.
You might be doing this because you want in at a low price (like our friend R*
), or because you are shorting, or whatever your motives actually are to see the price going down. There is a decent chance the pps could climb back up to 12 or 15 cents very quickly on good news, so if you have been accumulating in the 4 to 6 cents range, you stand to pocket some nice change.
I would actually buy right now if I had some free cash, which I don't ... My average is pretty low anyway, and I think that even if Laramie ends up being pretty inept at turning things around, he'll probably drive the price back up at some point to take advantage of the shitload of options he has at 6 cents ... And there is also the possibility that he is the real deal and that he can turn this thing around, but that is a gamble as usual ...
For example right now for SPKL, the ask is 5 cents and the bid is 4.5 cents: you could enter a sell order for 4.6 cents and then enter a buy order at that price (from 2 different accounts, but you might not even need 2 accounts). All of a sudden it looks like SPKL went down another 8%, even if you just spent 20 bucks (including your trade fees) ... If you are the guy sitting at 4.5 cents with a large buy order, you stand a good chance to get one or more people to decide to throw the towel and get out. It's a pretty common tactic and it does work. Add to this posting negative crap day in and day out on the boards where the stock is being discussed, and you can get some traction.
You might be doing this because you want in at a low price (like our friend R*
), or because you are shorting, or whatever your motives actually are to see the price going down. There is a decent chance the pps could climb back up to 12 or 15 cents very quickly on good news, so if you have been accumulating in the 4 to 6 cents range, you stand to pocket some nice change. I would actually buy right now if I had some free cash, which I don't ... My average is pretty low anyway, and I think that even if Laramie ends up being pretty inept at turning things around, he'll probably drive the price back up at some point to take advantage of the shitload of options he has at 6 cents ... And there is also the possibility that he is the real deal and that he can turn this thing around, but that is a gamble as usual ...
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