Jake, it looks like the mechanism that CINN is applying is to take command of trading by leaving only a 0.0001 gap between bid and ask. When someone bids higher, they fill and maintain control with their bid/ask. When someone offers to sell lower, they have the opportunity to let the pps drop to the lower price, establish a new fractional bid and ask and retake control of trading at that new level. It could be worked both ways using that technique, but for the last couple days, the mechanism has been used to walk down price.
I suppose that once some large or institutional investors decide they want to support the pps, such shenagigans cannot effectively be practiced, but those going to market with demand for a few thousand shares at a time can easily be herded along.
My sense is that this pressure is being put on PPHM to keep the pps below a buck, since few who are friendly to PPHM interests would like to see PPHM get the warning letter from the NASDAQ. There are those that will let loose their shares, simply because the pps is below a buck and the bashers are hyping with their rhetoric. Whether that pressure is meaningful to swaying PPHM's business plan is questionable, though, since as Lyttle noted in the CC, there are two six month periods for pps recovery applied before delisting would actually happen. While pps is depressed, the short party that is being confronted with how there will not likely be cheap private placement shares to turn a quick cover is having their interests served as weak hands turn over their shares at the depressed price. And just maybe, PPHM will let pps flounder long enough that the June 30 Russell rebalancing can bail out the short, if the total market capitalization drops low enough to shift PPHM off the Russell. It is a balance question, where on the one side, there is the number of shares a shorting party needs to sell as additional shorts to keep price depressed as opposed to how many shares are shaken loose for sale at the lower pps. As long as shaken shares exceed shorted shares, the shorting party is gaining ground. Even if the short has to increase, the shorting party is gaining time that could allow their situation to improve (e.g. a prospective Russell delisting).
Will PPHM be a spoiler and release news that moves pps before the short can cover? PPHM has a track record of not being effective at doing that. Now if they had help from a partner that is willing to oblige PPHM with price support as part of a deal, the situation can change overnight and create a short squeeze. PPHM explicitly said Monday that they are not pursuing a private placement and suggested the same when they filed for a $30 million shelf offering. I would think that PPHM has given its historic financiars and other parties interested in PPHM plenty of lead time to make their balance right, if such parties are still in the category of "friendly" to PPHM interests. If a party is not friendly to PPHM interests despite having been given plenty of time to come around..... we shall see what PPHM can do.
BTW, it looks like we are experiencing the shakeout I figured would occur before PPHM would move to "the next level". If not for doing DD, there would be no basis for telling the difference between a shakehout and real hardship when posters are going out of their way to deceive. I suggest all listen to that Cramer interview at least twice: once for entertainment value and again to take notes of what is common practice by hedge funds and how it may be getting applied to PPHM.
Best wishes and IMO.
KT
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