Latest Newsletter by OTC-Journal about explosion of PLPL:
The Plandai (PLPL)338% Explosion: It Started Last September
In my last edition entitled "Reefer Madness" I opined there were two Cannabis related stocks to own in my universe of long term coverage- Nuvilex (NVLX) and Plandai (PLPL).
A scant week ago when I published the aforementioned edition, PLPL was trading at about $.55. A week into the future PLPL started trading millions of shares, and closed Friday at $2.41 for a one week gain of 338%. It's fun to be that right. If you're a shareholder enjoy the ride, because weeks like the past one are few and far between.
Obviously PLPL shares went berserk this past week because there's a short squeeze going on. I've chronicled these kinds of events many times in the past.
PLPL has been the target of market makers shorting the stock for sometime. In fact, I would argue this past week's giant surge in PLPL is the result of events that occurred back in September.
Longer term readers should recall PLPL was the victim of a short seller induced hatchet job article back in September. If you will recall, a Seeking Alpha writer wrote an extensive hatchet job piece on the company providing all sorts of twisted facts to support his claim the company was some sort of scam.
For fun, you might want to go back and read my response to the smear. It was published on September 12, 2013. The article was entitled "Plandai, Just the Facts Please". Just click on the date and you can go straight to my response article.
Here's the lesson to be learned. The insane trading activity in Plandai (PLPL) this past week was the outcome of events that happened last September.
Experienced OTC investors know hatchet job articles like the one that was published at that time are fostered by short sellers- traders who create artificial supples of shares they don't own and sell them into the market, hoping to buy them back when a stock like PLPL goes down as poor, unsuspecting shareholders believe their drivel and sell in a panic.
The action in PLPL this past week warmed my heart as I know the short sellers who tried to spook you into selling your shares just had their brains beat out and likely are losing copious amounts of capital.
Where to From Here?
The short answer- I have no idea where PLPL will go in the short term. There's a phenomenon known as a "Rotating Short" wherein short sellers continue shorting the stock as it rises. The early short sellers are forced to buy at an extreme loss. This buying forces the stock higher, causing the next level of short seller to be bought in and pushing the stock even higher.
Eventually, the short covering ends, the craziness abates, and the stock cools down. You just can't be sure when it will happen.
I've known entire firms to go out of business over their losses in a situation like this. Understand- when you're short a stock that's going berserk to the upside, your loss potential is unlimited. When you're long, the most you can lose is the amount of your investment.
This past week's action in PLPL really happened last September. It just took a few months to show itself.
Here's the lesson- use high profile hatchet job articles as a source of ideas to go long when the stock in question swoons on the publication.
Another lesson- if you like a company you feel has potential, accumulate the stock when it's quiet and no ones wants it if you want to make real money.
PLPL is proof these kinds of articles are rather transparent attempts to scare individuals out when short sellers are stressed.
In case you're wondering- I'm still a long term believer in the future of Plandai (PLPL). I just have no idea where this stock will trade in the short term.
Could Nuvilex (NVLX) be next? The same author pulled the same sort of drivel out on NVLX. Who knows? Time will tell.
MarketByte LLC has received 300,000 newly issued restricted shares of Nuvilex for 6 months of coverage.
MarketByte LLC was paid a fee of $10,000 and 100,000 newly issued restricted shares by Plandai for coverage of the company. in 2012, and currently holds no position on PLPL shares.
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