Sounds similar to what happened to SRGE:
Signs a stock is targeted for short and distort manipulations
So you have invested in or were thinking of investing in a stock but noticed very strange occurrences in trading, such as selling of more shares than are available to be freely traded. Or despite buying at the offer, the offer moves lower. Or perhaps then strange and alarming amount of negative comments, innuendoes and predictions of doom and gloom....This my fellow investors, may be short & distort market manipulation.
What is it and why is it done?
The short answer is market makers, hedge funds and others with the ability to short securities start by selling stock they do not own. After a substantial position is obtained, i.e. sold a desired amount of shares, they then start a smear campaign against the company, its management, the security and even the industry they are in.
While they are doing this, the short traders offer stock below the lowest quoted offer. Known as "low offering". They might then start to sell more shares of the stock hitting the bid. Again with shares they likely do not even own. Then, through another trader or market maker, they low offer the last offer. Then continue to do this to make it appear people are rushing to get our of this stock. All the while messages are posted saying things like "I told you, insiders are dumping", "SEC halt pending" or "big sell off again".
If the short position is big enough ie has enough money on the line they may even hire dubious writers to write propaganda on the company and then increase the trading tactics described above.
All this is designed for us to panic and sell our shares we bought much higher so the shorts can buy these shares back and cover the short position for a hefty profit. ie sell high buy low. They make the spread in the middle.
While this almost always works, when it fails it often fails for the shorts with disastrous consequences. The short squeeze starts, the stock runs way up, much higher then it did in the first place, and the broker make them buy back all the shares at any price. Meaning the shorts loose serious money. The long shareholders celebrate.
This forum is to discuss these issues, uncovering culprits, and how to turn a lemon into lemonade.
Great post. Unfortunately the distortion artist, unlike promoters or "pumpers" does not have to disclose his short position or the fact that he/ she was paid to discredit the company and clutter up the boards with only negativity.
This makes for a very un level playing field. You have to ask yourself, "why is this person dedicating so much time to talking about this company or stock if they have no interest in it.
Red flags are numerous posts and obvious dedication and time. As we all know if you are not interested in a stock you just move on. Unless you are taking a short position or being paid to spread propaganda.
Private message me if you want the link I burrowed this from.
Signs a stock is targeted for short and distort manipulations
So you have invested in or were thinking of investing in a stock but noticed very strange occurrences in trading, such as selling of more shares than are available to be freely traded. Or despite buying at the offer, the offer moves lower. Or perhaps then strange and alarming amount of negative comments, innuendoes and predictions of doom and gloom....This my fellow investors, may be short & distort market manipulation.
What is it and why is it done?
The short answer is market makers, hedge funds and others with the ability to short securities start by selling stock they do not own. After a substantial position is obtained, i.e. sold a desired amount of shares, they then start a smear campaign against the company, its management, the security and even the industry they are in.
While they are doing this, the short traders offer stock below the lowest quoted offer. Known as "low offering". They might then start to sell more shares of the stock hitting the bid. Again with shares they likely do not even own. Then, through another trader or market maker, they low offer the last offer. Then continue to do this to make it appear people are rushing to get our of this stock. All the while messages are posted saying things like "I told you, insiders are dumping", "SEC halt pending" or "big sell off again".
If the short position is big enough ie has enough money on the line they may even hire dubious writers to write propaganda on the company and then increase the trading tactics described above.
All this is designed for us to panic and sell our shares we bought much higher so the shorts can buy these shares back and cover the short position for a hefty profit. ie sell high buy low. They make the spread in the middle.
While this almost always works, when it fails it often fails for the shorts with disastrous consequences. The short squeeze starts, the stock runs way up, much higher then it did in the first place, and the broker make them buy back all the shares at any price. Meaning the shorts loose serious money. The long shareholders celebrate.
This forum is to discuss these issues, uncovering culprits, and how to turn a lemon into lemonade.
Great post. Unfortunately the distortion artist, unlike promoters or "pumpers" does not have to disclose his short position or the fact that he/ she was paid to discredit the company and clutter up the boards with only negativity.
This makes for a very un level playing field. You have to ask yourself, "why is this person dedicating so much time to talking about this company or stock if they have no interest in it.
Red flags are numerous posts and obvious dedication and time. As we all know if you are not interested in a stock you just move on. Unless you are taking a short position or being paid to spread propaganda.
Private message me if you want the link I burrowed this from.
