We werde at $.405 a few weeks agoIs this possibly being done for some purpose to squeeze a result ? I hope the not.
Flooding the offer side of the board — Ultimately the price of a stockis found at the balance point where supply (offer) and demand (bid) forthe shares find equilibrium. This equation happens every day for everystock traded. On days when more people want to buy than want to sell,the price goes up, and, conversely, when shares offered for sale exceedthe demand, the price goes down.
The shorts manipulate the laws ofsupply and demand by flooding the offer side with counterfeit shares.They will do what has been called a short down ladder. It works asfollows: Short A will sell a counterfeit share at $10. Short B willpurchase that counterfeit share covering a previously open position.Short B will then offer a short (counterfeit) share at $9. Short A willhit that offer, or short B will come down and hit Short A's $9 bid.Short A buys the share for $9, covering his open $10 short and bookinga $1 profit.
By repeating this process the shorts can put thestock price in a downward spiral. If there happens to be significantlong buying, then the shorts draw from their reserve of “strategicfails-to-deliver” and flood the market with an avalanche of counterfeitshares that overwhelm the buy side demand. Attack days routinely seeeighty percent or more of the shares offered for sale as counterfeit.Company news days are frequently attack days since the news will “mask”the extraordinary high volume. It doesn't matter whether it is goodnews or bad news.
Flooding the market with shares requiresfoot soldiers to swamp the market with counterfeit shares. An off-shorehedge fund devised a remarkably effective incentive program to motivatethe traders at certain broker dealers. Each trader was given a debitcard to a bank account that only he could access. The trader'sperformance was tallied, and, based upon the number of shares moved andthe other “success” parameters, the hedge fund would wire money intothe bank account daily. At the end of each day, the traders went to anATM and drew out their bribe. Instant gratification.
GlobalLinks Corporation is an example of how wholesale counterfeiting ofshares will decimate a company's stock price. Global Links is a companythat provides computer services to the real estate industry. By early2005, their stock price had dropped to a fraction of a cent. At thatpoint, an investor, Robert Simpson, purchased 100%+ of Global Links'1,158,064 issued and outstanding shares. He immediately took deliveryof his shares and filed the appropriate forms with the SEC, disclosinghe owned all of the company's stock. His total investment was $5205.The share price was $.00434. The day after he acquired all of thecompany's shares, the volume on the over-the-counter market was 37million shares. The following day saw 22 million shares change hands —all without Simpson trading a single share. It is possible that the SEChas been conducting a secret investigation, but that would be difficultwithout the company's involvement. It is more likely the SEC has notdone anything about this fraud.
Massive counterfeiting candrive the stock price down in a matter of hours on extremely highvolume. This is called “crashing” the stock and a successful “crash” isa one-day drop of twenty-percent or a thirty-five percent drop in aweek. In order to make the crash “stick” or make it more effective, itis done concurrently with all or most of the following: