Crosses and share priceThere was a cross of over 847 000 shares, just a few minutes ago, within Wellington West Capital. Yesterday, not long before closing, it looked like someone was trying to cap the price, or "low-close" the stock by offering over 200 000 shares in the open market just 2 cents above the actual ask. This effectively prevented the price from moving up, as all the action moved to and stayed below that level. Then, three minutes before market-close the entire huge ask position disappeared.
I SPECULATE that perhaps the price has been maneuvered down to present levels just to set up the cross I mention above. Someone said I am offering 1.97 and since crosses have to occur at market price levels, the price had to be adjusted to accommodate the cross. The brokerage will sometimes drive down the price to a desired level by shorting in order to make the cross possible at the desired level. Once the cross is done, the shorts are covered and, ideally, everything is back to normal.
I know this is how it is done. However, I can't say with any certainty that this is what happened here. What speaks against my theory is the fact that there seems to be abundant "natural" selling pressure on the stock, which is cause for some concern. It concerns me because it suggests that if the price of gold weren't what it is our share price would be lower and that if the price of gold declines we are in for an unpleasant hair cut. In other words, it looks as if gold stocks are trying to undergo a correction, which in turn, is being hampered by record prices in gold.