Understand what you are saying, I do. However, the
Post# of 11899
Understand what you are saying, I do. However, the current share price does not reflect the companys earnings or potential earnings or valuations in any way shape or form. The PPS is nonsense. The market makers play any volume day to day and flip small amounts to make nickels and dimes and when the buying volume is enemic they drastically drop the PPS in an effort to drum up some more volume, assuming that if there are buyers on the sidelines then perhaps lower prices will bring them off the fence and do some buying. However in the case of RFMK stock, because there are 1B shares and so few longs and so few investors are interested in the stock and even know anything about the company or that it even exists, the buying volume is only going to be so high each day. This causes the stock to be somewhat illiquid if the price remains constant as most longs already have probably purchased most of their desired positions and the rate of new investor interest on a daily basis in the stock is limited. Yet there are still MMs and day traders who are aggressive in getting completely out, they want out when they want out, no matter how many buyers are present so they just dump and dump at ever lower prices. This price trend discourages buyers, and the dwindling and unsteady volume also scares buyers away because there is a concern about liquidity going forward. All of these artificial mechanics on the stock just make it such that the daily share price is nothing more than a joke, a meaningless number. Just remember that low subpenny levels can be quickly left in the dust if substantial accumulation begins at some point in the future. The trading is thin, so even on a few tens of millions of shares traded intraday, if it is mostly buying, then its possible we could at some point see pennies within a day or two of any spike in the volume. Many will tell you these spikes and drops are nothing more than the company pumping and dumping and so its a scam, but this is a pessimistic interpretation of the dynamics of a thinly trading stock. Sure, there are rather quite a few pump and dump scams in the pink sheets market but the SEC (not the DTC!) has done quite a good job over the last year to shut them down, and even though the usual behavior of a low volume pink is to have the price spike up with a spike in volume and then once the buying is finished a few sellers drop it back down on low volume, it does not mean every penny stock is a pump and dump scam, but most do not understand the dynamics of low volume thinly traded and unknown stocks so they assume much, based on their experience.
Its anyone guess where the PPS could fly to once the company accomplishes certain business goals so that it proves itself to be a viable real business operating with increasing profitability. In the meantime all the long term investor can do is accumulate at relatively low prices and spread out the buying so as to buy little by little over time and just hold. Ramp in and buy larger lots if the price falls lower and lower. One can play the day trading game, getting all in and all out within the course of a day or two in an attempt to game the other traders and MMs but its highly risky and its akin to just gambling your money away. I think RFMK is speculative but every portfolio should have at least one spec play and I think its a good long term hold.
$RFMK!