Dreimer200 wrote:
This is a company that made 76 cents a share last year, and is trading at less than $3.50.
It has obviously become a plaything for those whose approach to the market is far from that envisioned when stock markets were created. I assume the original idea was that investors would own common stock in enterprises, and prosper – or suffer – along with the underlying businesses.
The market has now become a trading casino. Money is to be made through high-speed computer trading – and -- as the history of Nobilis shows – through manipulation of sentiment through false statements, half-truths, and innuendo.
Current management may be competent at running hospitals, but they seem unaware of the new reality – in which appearances trump facts, and will be used by those whose sole interest is to manipulate market sentiment for profit.
I thought, for example, that it was a huge mistake not to institute a share buyback program. Whether any shares would be bought back might be completely irrelevant – but the message sent would have been that the company would make some effort to counteract absurd valuations. That, in turn would give existing shareholders more confidence, and make them less vulnerable to those with a manipulative agenda.
While arguments are made – in general -- for the advantages of the capacity for the short-selling of stocks, there is one factor which appears to be overlooked.
Small companies with limited market capitalizations are significantly more vulnerable to “short and distort” attacks than larger ones. The “playing field” is simply not level.
Indeed, such companies with small floats represent an almost irresistible temptation to those who treat the market as a casino; the small company is like a flare of blood in predatory seas.
(My personal view is that short selling should be banned – period. It runs counter to the original purpose of the markets.)
The upshot of all this is that the market has become less and less suited to investors. The average retail investor is being told – in pretty clear terms – that the market is, in a sense, “fixed.” Gamblers with huge resources are welcome to the casino. Investors not prepared for swimming with sharks should stay away.