News Focus
News Focus
icon url

Portguyofva

04/22/11 12:10 AM

#30998 RE: berstein #30991

Berstein,

"Yes, it is all about demand and supply except that after post R/S, we are still sitting on pink at say $7.90. Where would the demand side come from for a thinly traded stock at $8 at that juncture? There will be absolutely NO DEMAND for this at all and it is a far gone conclusion. The only trade we will see is the MMs are walking this down by shorting it...The reality is that the MMs would love to see something like this but' naked."

Your argument fails on multiple levels. First, you seem to be implying/think that VTSI is a liquid stock today while it trades for pennies. IMO, $79K of stock trading on a good day is not liquid. VTSI lacks liquidity today, and it will still lack liquidity post split, until it gets increased visibility. A good day today is a million shares and I fully expect a good day post split will be 10K shares.

Which leads me to the second flaw in your argument; with the poor liquidity, MMs will be forced on occasion to sell naked to maintain a market, but you have got to be kidding yourself if you think that is a risk MMs like to take, particularly with a thinly traded stock whose fundamentals are solid and improving. The only MM that would willing short VTSI naked today, or post-split, would be a criminal whose intent would be to manipulate the stock which is illegal as he!!. Does it happen, you bet, but a legitimate MM is not going to risk their firm to make a few pennies on a stock that doesn't even trade a $100K a day. If this was C or SIRI, you would likely turn up some criminal activity.

It sounds to me like some lousy investor who couldn't face their own bad decisions has got you drinking the kool-aid that all MMs are manipulators, and the reason why stocks go down in value. Do your research on MMs and understand how they make a market and how they make their profit, and you will discover that stocks that go in the tank, typically go there because they deserve to.

You bet, 9 out of 10, or 95 out of 100 (whatever the ratio is) RSs continue to go down post-split, but you need to understand why. They were junk companies before the split, and they were still junk after the split. That is where VTSI is differant. If you think VTSI is junk, I don't understand why you are even posting on this board?

I'm not saying we won't see price dips; I'm actually hoping for some, but I'm not so foolish that I am going to bank on it, because there is a better chance that we won't see anything lower than where it traded yesterday.

You may be one of the old timers and hopefully you’re sitting on a nice profit, but you need to realize there is new money on the sidelines waiting to pick-up your shares on the cheap. I've been trying to build a decent position in this stock for months and it has been anything but easy. I've experienced firsthand how tightly this stock is being held and I pity anyone who gets stuck on the short side post split.