part2:
A post was in my thread b4 that stated “So what is the MM's eventual game plan? What is the purpose of keeping the share price low, if they have short positions on this stock then surely their best bet right now would be to close them as quickly as possible. If they are still selling shares (or shorting even further) at lowest prices possible in the current market, then they are playing a very risky game - I would have thought these professional traders would not take such a risk?!
My understanding of MMs was that they made their money on the spread, rather than shorting stock.”
First the purpose for keeping the price low is to have people panic sell like what happened before. I’m sure many MM’s filled some of their short position and made a nice profit with all of the dumping that went on (I remember someone saying they sold 30,000 shares at .20 with over $1 cost basis).
Second whatever the MM’s are net short in their trading accounts I’m sure they would like to close them out right now. The only problem is that no one is selling because the people left are hard core believers and buy and hold and are not here to trade it on spikes and dips and the other are the institutions that hold a majority and have a much higher cost basis (everyone except Southpaw who we have seen in the past will sell their position out in a heartbeat. They are playing a very dangerous game right now and the problem is they are painted in a corner. This reverse was the worst thing for them. While W/L might not know how to run a company…they do know how to structure an offering to protect their interests and keep them out of trouble by offering t to ALL of the shareholders big and small.
The MMs have no choice right now to kep it down or else their trading accounts take a big hit. Right now the key is the warrants. Thet are hoping to keep the price in the .70 range and get their hands on the stock through the warrants. It is the only way they can fill their short position right now. As I wrote when the offering first came to light….the key is the warrants. They are again hoping the short sighted investor will look to get out and allow them to fill their shorts at lower prices than if everyone held.
So based on my speculation I’m hoping for some good news on the 10Q and am happy right now the warrants are not tradable. It could make for an interesting “perfect storm” for us “bagholders” as we are so affectionately called. It is a dangerous game sometimes being on a trading desk and W/L has more information than us (DTC sheets that would expose what amount MMs are short and the shareholder lists, etc)
Finally the statement of “ My understanding of MMs was that they made their money on the spread, rather than shorting stock.” Is correct….in a rational market and without greedy crooks that is what is supposed to happen. But at times they see an opportunity to make a lot of money just because they are big and have deeper pockets and can control and manipulate a stock. I hope for all of our sakes it backfires on them this time. GLTA (except those MMs who are short)
