There are at least two kinds of traders, those who stare at charts and those who stare at the market factors. Charts give you raw data on the buying and selling patterns of other traders, data which can be used to predict the future buying and selling patterns of an analyzed stock. But at least for the moment, I think WDDD is a scenario where you throw most of the charts out the window for the time being. Why? For these reasons:
1. The event currently underway is historically unprecedented in the life of WDDD. There is no way for a chart to predict that which has no prior history in the company. Charts function extremely well where there is no news. But WDDD has news of a Markman, and of other similar companies with pre-Markman rise in share price, and of low float and undervaluation, and of some really great lawyers on the case, and of Activision with a history of settling, all of which the charts cannot see or account for.
2. This stock is not going to trade like a pump & dump, triple zero, penny stock. In the triple and double zero stocks, anyone with a piggy bank can buy one million shares and dump them on the market quite soon, but with this stock priced at 40 cents right now, many of the impetuous, trying-to-gain-enough-money-on-one-stock-to-pay-off-my-mortgage traders never enter, and for that we can be thankful. Moreover, this board has some great DD. Investors throwing a lot of money at this stock are well-informed. This produces a thoughtful collective and drives away a lot of would-be emotional investors, and for that we can be thankful.
3. As I mentioned before, WDDD investors appear patient. The whole premise of investing in WDDD is undergirded by a 4-month wait. Low volume on charts, therefore, does not equate to panic selling. "Why would anyone panic...we're hear for the Markman, haven't you heard, and that's not until June 27! Sit down, relax, and enjoy the ride..." We're all aware lower volume will come, but that is to be expected. It will be followed by the next wave of investors who became recently aware that WDDD even exists.
If you stand back and consider where WDDD is in reference to VHC, PRKR, and VRNG, it is chronologically after them. Investors who have learned a great deal about the patent litigation process are looking for the next play, of which WDDD is a great one. Therefore, I don't believe WDDD is going to have the same gradual rise in share price leading into the Markman that PRKR and VRNG did. Rather, I think the next 2 months (March especially, and April) are going to see a rather dramatic rise in the share price as new investors pour in early, ahead of the crowd (and thereby they become the crowd), and the last two months prior to the Markman (May, June), the price will churn, some shares will change hands, and there will be a small pop in price 1-2 weeks prior to June 27 due to investors wanting in and very few wanting out anymore.
What does this look like? I'm going to go out on a limb and do that which is ill-advised: offer a hypothetical share price, according to which I am trading (but according to which I'm not in any way recommending anyone else trade), based on the information above guided by that which already took place with PRKR and VRNG:
Market Capitalization (Share Price) Time Frame:
80 - 100 million (~$1.00 - $1.20) Late-March to Mid-April
80 - 120 million (~$1.00 - $1.50) Mid-April to Late May
120 - 140 million (~$1.50 - $1.80) June into the Markman
180 - 200 million ($2.20 - $2.50) June 28 if Markman success
I have no idea June 28 if Markman un-success
Whatever you do, don't view this with authority. These are my own thoughts on how this will go, and I'm trading accordingly, but do your own analysis to determine how you will trade. If this is helpful, great; if not, throw it out the door. Only time will tell the accuracy; hindsight, not foresight, is 20-20. Have a great day all.
ps-I will throw my own guess-estimates out the window if we receive news of other lawsuits. Other lawsuits, depending on the company sued, could easily bump up the prices 10-15%.
AI
