Never say never. No one knows the future, especially the future trading behavior of the wild volatile swings of a pink sheets sub penny stock. In my opinion, declaring that something or anything or nothing or whatever, will or will never happen is just utter silliness. I can understand the point about Ironridge and the fact that through the funding deal they have with RFMK, they need to keep selling shares down from say 9.99% stake to say 5% or 6% in order to reload in order to systematically get repaid for the funding. However, there do exist stipulations and constraints for this process and it depends on overall volume and price movements. So if the stock is trading with a lot of investor interest, the volume is high and the price is moving up then IMO the effect of Ironridge selling, especially over time is greatly diminished. The other thing I would point out is that we can all speculate about who is represented by VFIN (actually probably several clients, not just one, both buying and selling), we can speculate if there is dilution going on or not, but none of us can really be certain. If there was or is dilution then within several days we would or will know about it via investors pinging the transfer agent for the up to date SS figures. If Ironridge was dumping shares then I should think there would be a Schedule 13 filing 10 days afterward if their percentage stake changed. If none of that is reported and there was no change then we will know this is all just speculative nonsense from the peanut gallery. I am not saying it is not so or it is so, I am merely pointing out that such declarations are mere speculation and guesswork, right now.
I think the main point which comes to my mind when thinking about the effect of a large stake holder in the company needing to dilute to repay a "toxic" funding agreement, is the fact that what really matters is the overall investor interest in the stock versus the percentage stake the funder has in the company and the ratio of that stake versus the average daily volume.
Let us put it in perspective. Ironridge owns about 143M shares, so far as we know (for now) and they do not desire to have a stake larger than that because it would go over the 10% threshold and they would not be able to use the 13-G filing, they would need a 13-D and they obviously don't want to go to the trouble of that. The float is around 1.2B shares now. So their stake, if held constant, makes up roughly 12% of the float. Consider that RFMK's recent largest daily volume was about 140M and today was 100M, and those volume levels are actually historically very high. Let us average for the sake of simplicity and see that about 120M daily share volume is at the high level of daily trading for RFMK. The PPS is at about the 10 day MA, 0.0017, thus on average for historically the highest volume levels, the stock trades about 120M shares, and in dollar terms, that is about $200,000 worth of stock. That is 10% of the float. Well, Ironridge owns in total about 12% of the float if held constant, therefore, Ironridge activity alone cannot account for such volume activity in the stock, especially when considering that this kind of volume can occur for multiple days on end. Let us gain a broader perspective. Look at the high volume levels traded in CBIS. CBIS traded on Feb 28th 2012 at $0.16 with about 100M shares. That represented about 12% of the shares and in dollar terms, about $16,000,000 worth in daily trading. Now obviously these are two totally different companies, but during such "runs" as we like to call them, typically the MMs and market participants do not care much about specifics other than they know its a penny stock and its "running". Compare RFMK and CBIS largest volume trading days, for RFMK it is $200k and for CBIS it is $16M!!! We know that CBIS trades on the OTCQB and has no DTC chills, but RFMK is a pink sheet stock and has a DTC chill. I think the main explanation for the drastic difference in how many investor dollars can trade hands in these two stocks is because of the difference in the exchanges and the mechanics of the stock itself, not any particular seller or sellers who may or may not be in the stock dumping or diluting. Its as simple as that. The fact of the matter is that even on its largest volume trading days, RFMK stock does not trade much investor money and IMO it is mainly because of the lack of investor interest in the company which mainly comes from the lack of knowledge of the companys existence coupled with the fact it is on a risky exchange, the pink sheets AND has a DTC chill, not much else. CBIS trades 80X times the dollar amount RFMK has ever traded and there is a reason for that and its not because Ironridge is not dumping shares in CBIS. The point to all of this is that the main way we ever can "see a run" is by way of investor interest which will bring volume trading over 25% of the float and that alone renders Ironridges selling or buying actions meaningless. If or once large overall volume comes into RFMK, as in, real long term investors, thousands of them, (not a couple dudes on iScum and a few shady MMs) piling into a long term investment into RFMK, THEN there is a chance for a "run" to begin. I do not subscribe to this assumption that Ironridge is diluting and "killing the PPS".
I think it is rather suspect to assume that there is a causal relationship with company events and corporate actions and news/PR and the stock getting pumped and dumped. I think its more likely that the market players play the stock on the news which happens to be what the company is getting accomplished at that time. The causation is the other way, the company systematically gets things done, news comes out or is planned to come out about it, the market knows this and creates a pump and dump operation to make money off of johnny come lately buyers/flippers/traders at the top. To say that for certain the chart formation was necessarily caused by the company insiders putting news out in order specifically to dump into the volume is just total speculation and guesswork. Just my opinions.
GLTA
$RFMK
