LPH: Buy the Pain!!!
The reasons for the drop from mid-2.60s to low-2.50s to low-2.30s is event-driven:
The first drop was when the Navellier cattle herd were told by their leader to sell and two days later RedChip lowered their 12 mo. PPS target from $6.50 to $5.20.
The second drop was last week when RedChip announced a toothless-warrant conversion option combined with a dead-serious threat of future plans for expansion via dilution. (Although later RedChip tried damage control by stating they would not dilute "at these price levels", this did NOTHING to restore confidence because the future threat of dilution after PPS rises would clearly cancel any short-term bounce in PPS - although long term it could still be very bullish.)
The third drop was a response to the macro news about the SEC and congress investigating reverse mergers in general, which was amplified by articles in all the major media (Bloomberg, MarketWatch, WallStreetJournal, TheStreet) and a very specific bashing-for-ratings prime-airtime attack on LLEN yesterday by Herb Greenberg at CNBC, which scared the hell out of retail investors at the sheer power of the media and their puppetmasters from this example of how they can instantly correct any Chinese stock's PPS movement at their whim. As a result, many US-listed China microcaps were down 3% to 6% yesterday within a couple hours of seeing LLEN tank by 17%.
So my original prediction of holding the high 2.40s to low 2.50s obviously has been turned upside down by a change in LPH's company thesis - they are now planning near-term dilution - and changed by short term broad-based short attacks and negative articles resulting in sell-offs.
Right when you think things cannot get any worse -- BUY THE PAIN!!!!
AI
