Replies to post #4239 on 420 Property Mgmt. Inc. (FTPM)

[stervc]

Regarding the Form T-Trades...

In my opinion, the T-Trade is a transaction that is either for the trading activity or against the trading activity through the selling or buying of a huge block of shares that was transacted by a Market Maker (MM) for its client that is either the company or someone related to the company... be it the old/previous management or the new management. These blocks are so big that to keep from swaying the market one way or the other to entice selling or buying during market, the MM executes the trade usually within 20 minutes after the market closes.

Since the MMs could have easily taken FTPM back down to the trips (.000s) and haven’t, then I believe that the Form T-Trades that we have been seeing here with FTPM are for positive reasons. I think such is not only ”legally” orchestrated, but is also part of a prelude before certain news is released. Think about it… if the selling was related to negative dilution reasons or to raise capital, then they would have been releasing news trying to pump the price of the stock higher to maximize the selling of shares at higher prices for greater gain. What they are doing is quite the contrary. For now, they are still being very subtle in their delivery. So, when news do come, I am going to be inclined to believe that it will be for reasons of substance and growth.

I also believe that the shares that we have been seeing sold/bought/transacted are part of the Section 3(a)10 Exemption shares that I had spoken of below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=125974677

I also believe that these shares are being bought by more than just us retail here and are being absorbed by some that are quietly in the know with what's transpiring with the company. I also believe that the MMs do not have a huge inventory of shares and that they know what is in the mix here too because with all of the volume over the past weeks, we would have been back down to the .0005 range or so by now. The MMs are keeping this up on purpose because they too know where this is going. I say this because if you look at Level II for FTPM, the Ask is never saturated with any significant inventory of shares as like we would see if the company was ”purely” dumping shares. Most, if not all, of the dilution that is currently taking place "could" very likely be factored into the last reported Outstanding Shares (OS) number as I had explained in the link/post above which is also per the IR for FTPM.

To elaborate further, imagine if between 4 of us, each had 10 million shares and were trading (flipping) FTPM daily or almost daily. Over a 2 to 3 span, that would be 120 million retail shares that would be circling amongst retail investors that would have no actual impact on the change of the OS, but the perception would be to wonder where those shares are coming from... or if those shares are coming from the company through dumping. I don’t believe it’s the company dumping shares. I’m going to take my chances and believe what the FTPM IR guy has been telling people in that the selling is coming from old debt that was created before the new management had gotten there which is already factored into the OS. Again, I believe it is from the link/post above and is either done or nearly done. IMHO

The will be for it to cease. Even if you go worst case scenario and say that I’m off and that the company added 100, 200, or even 300 million extra shares, it still shouldn’t significantly matter with where it should still end up at. Please, read this post below and create an OS to be as worst case scenario could possibly be and place it into the formula explained and share what you get for a valuation:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=125960379

I hope the above helps. This below is also a good read on the Form T-Trades:

https://incrediblepennystocks.wordpress.com/2013/06/25/incredible-penny-stocks-what-is-a-form-t-trade/

Incredible Penny Stocks: What is a Form T-Trade?

There is much confusion and rumor regarding “T Trades” in the penny stock market. Nasdaq Pink Sheet stocks often close at a certain price and, within 3-10 minutes after the closing bell, will show a large final trade that gets labeled as an “after hours” trade. Simply put, this is an inaccurate description of that trade.

To understand how this trade works, one must understand the role of the market maker. The most frustrating aspect of investing in the pennies, is market maker manipulation of the stock price. Anyone that claims this manipulation doesn’t happen truly does not understand the OTC Market. Market makers are in place to “control” the price of a stock and, theoretically, to ensure that the market reacts properly to supply and demand for a certain stock. Unfortunately, when large sums of money and a lack of regulation are involved, more often than not, there is manipulation that suits the needs of certain investors or the market makers themselves. After all, they are in business to make money as well. If the average investor is purchasing stocks in the OTC Market, that investor is truly at the mercy of the market makers involved in the purchase and sale of that security.

When researching this article, The response from the SEC defined a “Form T Trade” a “trade reporting form used by broker-dealer members of the Financial Industry Regulatory Authority, Inc. (FINRA) to report equity trades executed either in the OTC market or during extended hours trading. Recent amendments to FINRA rules will expand the types of situations in which Form T is to be used, but they are not yet in effect.” The response also recommended contacting FINRA. Notice the first portion of the response. “either in the OTC Market or…” Once again, it is confirmed by the SEC that ”after hours” trades do not exist in the Pinks.

FINRA was much less transparent in their response and essentially spewed the same limited information regarding T Trades that is available on their website. None of which, accurately reflects why these trades occur in the OTC Markets. (www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p123750.pdf)

Trying to decipher the meaning of these trades with the limited information that is available on the subject led down several dark paths. Clearly, the average investor is not meant to understand the concept or its rules. Even more disconcerting is the second part of the SEC message “Recent amendments to FINRA rules will expand the types of situations in which Form T is to be used, but they are not yet in effect.” That means there is even less transparency about this mysterious T Trade.

After months of due diligence, there are a few poorly publicized uses for a T Trade. The most important factor here is that the only requirement of market makers by FINRA is that they must report all trades in a day. They are not required to do so when the actual trade occurs.

To avoid creating “an unbalanced market”, market makers often do not report certain trades during the day to the public and then use a T Trade not to “scare” investors into thinking a market for that stock is going in one direction or the other at the spurring of one large investor.

If a market maker wants to accumulate a large amount of a stock in one trading day, that market maker may actually not report any of the trades that occurred until the trading day has ended so as not to alert the market to the collection. This practice is completely legal under the FINRA rules of the OTC Markets so long as the trade is reported at the end of the day.

To execute a Market on Close” order, a market maker may have an order to purchase the stock at a certain price at the end of the trading day. This is the most unlikely scenario because it needs to be assured that someone selling the stock and someone buying that stock are agreeing upon a price. Simply put, this is more likely with insider buying and selling.

The T Trade that the public sees is nothing more than one or all of the above scenarios. The T Trade reported at the end of the day can be from one market maker or many involved market makers. It can be a single purchase price but is usually an average of all of the previously unreported purchases from that business day.

Penny stocks are an exciting and lucrative business. As most everyone will tell you, it is not for the weak of heart. There is definite money to be made in the OTC Markets and more penny stock millionaires are made every day. But the best way to win the game is to know the rules!

One additional fact surfaced about market makers while researching T Trades. Did you know that market makers are not required to honor their offer price? That is correct, because the OTC market is essentially a “best offer” market. If a buyer meets the asking price for a security, the market maker can, and often does, decide to rescind the offer, not sell the security and adjust the selling price.

v/r
Sterling