In response to Fink's request for someone to explain, in laymans terms, what the meaning is behind the recent "trading". I would think the easiest and simplest answer is that there is no meaning at all to the "trading" right now. It is completely without any justification, merit, consequence or meaning. The "trading" is a joke and is laughable. We cannot even be sure that the "trades" printed on the tape right now are even an exchange of real shares with unique market participants. The printed tape could very easily just be IOUs signed by one foreign participant and delivered to another participant for which also does not use the DTC in any way so as to create a "dark pool" of a market in the shares of the company. Note though that because it is the case that such brokerages and dealers not participating in DTC clearing can still naked short and sell and buy each others IOUs and entitlements, there is potentially no end to the chicanery of painting whatever price or volume data points they wish on any given day other than as regards the limit to what they wish their potential risk of exposure could be if at some point the stock did come off the global lock and trade higher while the failures to deliver would mount and cause a more risky margin exposure.
In laymans terms, a simple analogy can be used. Imagine there are children at play in the school yard, playing dodgeball. The entire 5th grade class is on two teams and a myriad balls are getting thrown this way and that and many children are going out and coming back into the game legally each minute. The complexity of the game is high and there are many targets on the opposing team so each player has a rather fair chance to score hits and a fair chance to not be hit. The players who go out and come back in are marked down and counted and scored. Then suddenly one of the students yells to everyone that he hears the bell ring and its time to run back to class and most of the children run back and so the game appears to be over, however there remain two children who dismiss the warning and continue to play on. These two children who do not care about the rules simply throw all the balls at one another getting hit time and again, and laughing they have a grand old time. However, the counter continues to keep track of the "score" and it appears that while before hand each team was about even, now one team appears to be completely losing, ON PAPER. Should the actions and play of the two bad children count?! Further, the children run inside and realize it was just a false alarm and they still have a while until recess is over so they run back outside with reckless abandon, pick up all the balls and continue playing. Very quickly, the score card and complexity of the game return back to normal. The actions of the two bad kids still remain but it means next to nothing because their affect on the game is drown out by all of the children playing the game properly.
This is in effect what is going on. Once the noise of the daily large market for real shares dissapears, you get one or two participants for whom the stock becomes just a toy and there is no respect for any rules so we witness incoherencies in the score card as IOUs are shuffled about without care. Real shares could in fact be trading but no one can know, thats the rub. No one except the SEC could possibly prove the details of each "trade" going on in the market right now. One thing you can know though, is that just like the children playing scenario, once the hordes come running back en masse to resume the playing of the normal game, any and all of the actions and play stemming from the one or two players who remained and did not follow the rules of the game and played only with themselves...
... eventually get drown out and mean absolutely nothing in the long run. Sure, anyone could open an OptionsXpress account and place a bid for 8 cents per share for 100 shares and the pps would print a "gain" of hundreds and hundreds of percentage points for the day, but it would mean nothing. Because the volume "trading" is insignificant compared to the volume which could trade if all of the children were once again playing in the yard. Me thinks perhaps one of the bad children stole the teachers whistle to sound a false alarm and temporarily got everyone to watch only their crony ball tosses and dodges. Eventually, I would think that it would be realized that nothing has changed and there is only fun to be had by running back in to play with all.
I guess eventually we will all find out who is right, in the end
$SFIO!
