Replies to post #69172 on 8000 Incorporated (EIGH)

[514]

its all theory ..

[nez]

Covering will not cause them to go broke.

[lioncub]

"Are the MM's REALLY that stupid?" excellent point

[zxc]

"Are the MM's REALLY that stupid?"

No, they're greedy. Even "professionals" get greedy. Blinded by greed, they have sold shares to the public that don't exist. They have gotten away with it for a long time, and expected to get away with it this time, too. However, they are now confronted with a problem: An unexpected new circumstance, which exposes their wrong doing, to which they have no new answers, only their old tricks.

"that professional MM's would do anything to put themselves in a position to go broke!"

No one is going broke. 99% of the time they get away with it. Losing on one short squeeze is part of doing business.

[MustBeFree]

There are a couple points that should probably be made...

1) The MMs are not stupid. There is HUGE money in the financial markets. This allows them to hire the best and the brightest minds out there. They are overconfident and egotistical. Who can blame them. Their tactics work more than 99% of the time, why would they believe they wouldn't work here?

2) They continue to work the PPS because they the game is being forced on them and they are trying to maintain control. Can you imagine what would have happened if the started covering as soon as the news hit yesterday? Most retail investors do not even bother to read (absorb) news. They judge the quality of the news by the reaction of the stock price. Had they started to cover and caused the stock to explode, the dumb masses would have piled in. Instead, they worked the price down to give the impression that the news wasn't good. This effectively keeps the dumb masses out and potentially causes other longs to sell. But judging by the volume, they were not successful in the later goal.

3) The MMs (institutions) will not go broke. In fact, it is likely they will actually make money on these stocks even if they squeeze. Only they know when they have covered and they may very well go long after covering and profit from other greedy investors jumping in at the end of the run.

4) What is happening here is bigger than EIGH. If there really is illegal shorting going on (likely) then the MMs risk it being exposed. If they lose this battle (which they are), it sets the script for how to take on illegal NSS. In the end, the MMs will change their tactics and find other ways to make money. But they don't want to lose a cash cow they've been benefitting from for years.