XpresSpa Group Inc (XSPA)

[tobinator00]

What has happened this week is the large buyer(s) that pounced on the stock with no publicly known news stepped away. Stale longs and traders exited their positions and shorts applied pressure. As fiestyshark pointed out there were 11 market makers on the ask at $3.20 that subsequently caused the stock to fall to $3.11 quickly.

http://stockcharts.com/h-sc/ui?s=VRNG&p=D&yr=0&mn=4&dy=0&id=p57700612870&a=298953728&listNum=3

I believe we can all agree that it was institutions/funds coming into Vringo on Friday. The retail side is not bullish at all nor do they have the capital to spend to drive the stock like we saw on Friday.

The sudden push on Friday does not make sense. Both long buyers and short sellers want to buy at the lowest price possible. Generally, funds do not scramble to buy or cover all at once as that does not bring about the best cost basis or most profit to cover. If we get no news this week to explain a potential leak and move for last Friday, we simply may never know the cause. I do believe the spurt from $3.40 to $3.70 was caused by short covering because shorts had no idea why the stock surged and covered in a panicked fashion.

In my opinion, Vringo's stock is much more healthy today than two months ago. The reason is we have had about 10 million shares being picked up and held by Russell 2000 index funds. Those 10 million shares most likely came from stale, frustrated longs who just gave up. If it was not for the index funds, those 10 million shares would be readily available for sale on any price spike. Now those shares are locked up.

Fast forward a month, between Wednesday and Friday, about 14 million shares were traded. This was bullish buy volume. Thursday, Monday and Tuesday were 6.1 million shares of bearish volume. The trade particularly this week most likely are of frustrated longs getting out (like people had posted) and opportunistic shorts piling on. However, we have a net 8 million shares that have not come back on the market.

Thus, my position is that bearish retail is getting out and bullish institutional (& index funds that had to buy Vringo) are coming in. I can't really see in the message board posts that hardly any new retail longs are showing up nor do I see people being in Vringo for any length of time are adding to their positions.

A few months ago I was thinking a Molasses Jackson ruling in Vringo's favor would result in a very soft upward surge because so many retail people were itching to use any strength to get out. Now looking at the sentiment and the trade today, it seems like many of those people are out and long gone. Those staying appear to be more willing to see how the Google ruling comes out and have an eye towards ZTE litigations in several foreign courts.

It is too bad we can't apply heat to Judge Raymond Molasses Jackson. Molasses moves much more quickly when heat is applied.