RE:RE:RE:Hammered
Rookie,
I agree there was quite a few people who panicked with the drop off, which is exactly what shorters want, especially in an organized short attack. They want to create an unexpected drop, fan the flames of confusion and panic to get others to sell, creating a self fulfilling prophecy of a spiral downward.
Many people see only the downward spiral, and think " Well there MUST be some REASON that I don't know about for this, but I better get out quick"
The next thing that happenes (and I am sure happened here) is that the spiral starts to set off people's "STOP LOSS orders" which starts to flood the market with even more shares automatically when their pre set price is hit. More selling equals more panic, equals more spiral, and the cycle continues.
I used to invest in and out of APHRIA (the cannibis company) and saw this happen. They went from around 20.00 all the way to 4 dollars on an organized short attack. The difference there was it was open advertised by the shorter what they were doing, and they even cooked up some BS report as proof that openly misled investors with shady and half baked incomplete information as their justification.
In the end it was bunk, the company may have overpaid somewhat for some assets, but it was blown 100 times out of proportion to panic everyone, and MAN did it work. They shorted it major, caused the crash, when it hit 4, covered their shorts making easily tens of millions, but most likley hundreds of millions, and then I am sure re-bought like mad when it got to 4 dollars (as they knew their info was BUNK, and within a month they were at 8 dollars and few months later back to 14 dollars.
Now what was done to Wallbridge was not advertised like it was with Aphria, but I have no doubt this was a short attack. A stock that is less than .50 cents is a lot easier to short big than a 20 dollar stock obviously, much less capitol needed, and people are more nervous and more easily rattled with a .40 cent company than a 20 dollar company. Add to that (as Jeepfan pointed out), they also knew and took advantage of the fact Sprott's buying has basically limited out, and you have a good scenario for a short attact. Throw in a pile of automatic stop losses getting triggered, and POW , you get what we got the last two days.
However, in the long run, as many posters pointed out, what goes down FAST for no real reason (or a planned and plotted reason of grabbing people's shares) will come back up. If it was mostly panic it will recover as there was no real reason for it, and if it was a short atttack, it will recover because they got what they came for ( 7 million of people's shares yesterday) and it is now in their interest for it to go back up as they are now holding a BOAT LOAD of shares.
I hate that shorting is legal, hate the way it can be organized to basically steal investors money, but there is one small silver lining in it. IF your company is targeted by shorters so they can acculuate a great deal of the stock very cheaply, there is a reson they are doing that. They WANT your stock, because they KNOW there it LARGE future potential.
An organized short attack cannot be a cheap or easy thing to do. You need A LOT of capital, many buyers, sellers, computers, office space, accounts, sharp people running the whole operation, and even with all that, there is no guarentee that it will work, they can often be the ones who loose out HUGE if it fails. So when a group does risk all this to take a HUGE pile of shares of your compnay, you can believe it is a vote of confidence that they would risk so much to get your shares.
This is all totally my opinion based on my own experiences, and I could be totally wrong, but just wanted to share what I see happening here.
- Jefe de Oro