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Stock Thread (22 Viewers)

It is odd the run-up CYDY has had in the absence of any real news.  Such huge gains on so little information.  I can understand why folks would think something shady was going on with the stock.

 
sporthenry said:
It's not unheard of for companies to respond to these reports with press releases of their own. If they want to get ahead of it and state their own case. No idea if they're in a blackout period related to the data. 
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CEO will address shareholder concerns and give an update on CytoDyn’s progress on July 1 – Interview will be available after 9:30am PT
 

https://www.cytodyn.com

:popcorn:

 
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adonis said:
It is odd the run-up CYDY has had in the absence of any real news.  Such huge gains on so little information.  I can understand why folks would think something shady was going on with the stock.
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Agree.  It's funny how something like this screws with your mindset.  Nothing has changed about the company.

If we had been raising at 4-5% per day and we were sitting at $6.00, everybody would be over-the-moon and not even considering selling.

Because this was pumped up to 10 and then shorted down hard, everyone is apprehensive.  It totally takes the wind out of your sails, yet the stock price is still at a great level relative to a couple weeks ago.  I keep telling myself that I'm holding for Cancer results, so day to day swings shouldn't matter.

 
From the Cytodyn website:  CEO will address shareholder concerns and give an update on progress on July 1. Interview will be available after 9:30 am PT.  

 
chet said:
Bad timing.  Don't worry about it.  
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matuski said:
I failed 2 out of 3 tries BLMN, I am 4 for 4 on CYDY.

I imagine this is why people don't do this for a living.. rolling the dice.
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Yep.

FOMO and the false belief that 99% of us know anything more about these companies than others or that we can predict the future can be the ruin of many smart people. 

Occasionally we'll get lucky, and Chet sure seems to know his #### here, but I'm fully aware that I'm overmatched by the peeps who do this for a living. (But I don't have to beat or even match them to win my own game)

 
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[icon] said:
That's so ####ed up that they can throw that crap out there, then pull it back. 
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They accomplished their goal--they covered their short at lower prices.  Complete scumbags though--they are responsible for the lives of some victims.  Hope they burn in hell.

 
Question.  How do the shorters benefit from selling 9 million shares?  Why do they own 9 million shares?   And many of them were sold near 5 bucks.

Just confusing to me how shorts did that.  

 
ghostguy123 said:
Question.  How do the shorters benefit from selling 9 million shares?  Why do they own 9 million shares?   And many of them were sold near 5 bucks.

Just confusing to me how shorts did that.  
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rascal said:
Explain this to me like I know nothing.  Which is true.
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They didn't buy 9 million shares. They borrowed 9 million shares, then they sold them. Of course, they have to return them, so they buy back at a lower price, and that difference is their profit.

 
Sand said:
Well folks, looks like we dropped back to the price this hit last Thursday.  

Oh, the humanity.

I agree with the article above that the value of this is going to be set by the trial results.  Today was playing games while we wait for those.  I am under no illusions this is anything but a lottery ticket, but I'm holding mine for now.  

I am officially not looking at my brokerage this afternoon, though.  I'm just going to pretend today didn't exist.  :whistle:
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I hate to be a Debbie Downer, but to be a bit of a Devil's Advocate for a minute:

I'm always interested in the "lottery ticket" phrase within the investing world. I've used it myself at times. The problem is that investments are not anything like a lottery ticket, unless you're buying shares of Hertz when it's already bankrupt. 

When you buy a lottery ticket, you are putting cash down with hopes of a big prize. Maybe it's $100MM, or $1MM or even $100k. You outlay the cash and then wait for the result, with no intermediate steps of action.

This is not how the stock market works, even for OTC Biotech stocks. Buying a stock like CYDY is much more akin to sitting at the Blackjack table. You sit down with $10k and start playing. At times you are up, at times you are down. Maybe, as in the case of CYDY for most folks here, you're always up, just in differing amounts. But just as when you sit at a table in Vegas, you need an exit strategy. You need to think about how to take some of your chips off the table. It may be the CYDY can cure Covid, and HIV and Breast cancer and VD and the gout and everything else. But the odds of it are really pretty small. Just like the odds of sitting at a table in Vegas and turning $10k into $1MM. It's possible, sure. But you'd be better off taking chips off the table as your profit grew just in case the odds turned against you. 

The lottery equivalent for a stock would be if you they let you get your money back after they drew 4 of the 6 numbers and you didn't have any of them. That never happens. But if you own a stock you can recover some of your outlay (or more) along the way. 

Just a thought. 

 
Todem said:
Keep investing in those type of stocks.

Be willing to lose whatever you put into a stock like CYDY. And you will be fine. And no when you at least double your money....take your risk off the table and ride a free roll with the rest.

It’s like Vegas (when you play in the waters of a CYDY or similar low priced bio-tech stocks).....I go there once a year and am willing to lose the 4K I bring with me for 3 nights of fun, shooting dice. If I leave with my 4K I won. If I make some money....awesome. If I lose all of it...but had a great time? That was the cost of entertainment and I was willing to lose it all. 
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LOL, I just posted about a Vegas analogy but it was different than yours. 

 
kevzilla said:
They didn't buy 9 million shares. They borrowed 9 million shares, then they sold them. Of course, they have to return them, so they buy back at a lower price, and that difference is their profit.
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I guess I just don't understand how that works.

I know you can short a stock and make money if the stock goes down and then you exit.  Apparently I don't understand how you can manipulate the stock price doing that.  

I was under the impression 9 million shares were sold all at once.  Again, if they didn't own the stock, how were 9 million sold

 
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ghostguy123 said:
I guess I just don't understand how that works.

I know you can short a stock and make money if the stock goes down and then you exit.  Apparently I don't understand how you can manipulate the stock price doing that.  

I was under the impression 9 million shares were sold all at once.  Again, if they didn't own the stock, how were 9 million sold
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You really need to google it and read up on shorts and manipulation. And then understand that every small biopharma stock seems to always have these crazy moves with shorts. You can't even go to some of their message boards due to the volume of just #### talking.

I happen to have NWBO at the moment due to a non-FBG ""tip". In no way an endorsement, I strictly bought with gamble money and expect to lose it all. The short news makes it impossible to filter the actual news. Something about curing brain cancer.

Between them and CYDY nearly everything will be cured or at least treated.

 
ghostguy123 said:
I guess I just don't understand how that works.

I know you can short a stock and make money if the stock goes down and then you exit.  Apparently I don't understand how you can manipulate the stock price doing that.  

I was under the impression 9 million shares were sold all at once.  Again, if they didn't own the stock, how were 9 million sold
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They borrowed 9 Million shares and sold them all at once.  The sell price probably ranged from $9.50 - $6.50.  They would probably stop at this point and let investor fear bring it down even further.  They then start buying back in the $4-6 range.  

If they make $2 on each share, that would be an 18M profit.

 
https://www.investopedia.com/terms/b/bearraid.asp - This sounds pretty familiar.

Understanding a Bear Raid

The objective of a bear raid is usually to make windfall profits in a brief time period through short sales. If the bear raid works and the target stock plunges, short sellers can buy the shares back cheaply on the open market. The short sellers make money by selling the shares first, at what they believe is a high price, and then buying them back to close out their position at a lower price. The short sellers profit on the difference, such as selling when the price is at $100 and buying back at $75, making a quick 25% profit.

In a typical bear raid, short sellers may collude beforehand to establish massive short positions in the target stock. Since the huge short interest in the stock increases the risk of a short squeeze that can inflict substantial losses on the shorts, the short sellers cannot afford to wait patiently for months until their short strategy works out.

So they embark on the next step in the bear raid which is akin to a smear campaign, with whispers and rumors about the company spread by unknown sources. These rumors can be anything that portrays the target company in a negative light, such as allegations of accounting fraud, an SEC investigation, an earnings miss, financial difficulties, and so on. The rumors may cause nervous investors to exit the stock in droves, driving the price down further and giving the short sellers the profit they are looking for.

The repeal of the uptick rule in July 2007 is regarded by some experts as having made it easier for short sellers to embark on bear raids. The collapse or near-collapse of a number of leading financial institutions in 2008 is attributed in some circles to bear raids.

While bear raids may involve collusion and false rumors, which is illegal, there are also legal bear raids which is when a large number of people (or a few people) start shorting a large amount stock due to their concern with a company. They may also voice their legitimate concerns. As long as the information is not intentionally false and the shorts are not colluding with each other, a stock may see downward pressure due to the selling and increasing negative news. Many people will refer to this natural market behavior as a bear raid.
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ConstruxBoy said:
But if you own a stock you can recover some of your outlay (or more) along the way. 
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I understand and agree with much of what you say.  My cost basis at this point is just about zero - actually it's exactly $1,550.  I'm willing to lose that, though I don't see much chance of going to zero.  Just to be clear - I've lost $1500 on way stupider #### than this thing.  There was some OTC stuff I bought in 2000 that is just embarrassing to think about.  And my short foray into sports betting parlays in 2007.  Yeah, I'm getting a bit less stupid.

The vast majority of my purchases are boring stuff like PPL (thanks Todem).  

 
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ghostguy123 said:
I guess I just don't understand how that works.

I know you can short a stock and make money if the stock goes down and then you exit.  Apparently I don't understand how you can manipulate the stock price doing that.  

I was under the impression 9 million shares were sold all at once.  Again, if they didn't own the stock, how were 9 million sold
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Well shorting the stock consists of you selling stock that you don't own. So where do the shares come from? They're borrowed from you or I. An institution will lend someone our shares which will then be sold to someone. So in theory, you could own my shares or I yours. And they essentially just created new shares. So we would both 'own' the same security but the short seller would be on the hook for the other side of one of those transactions. I have a feeling that will either make sense or make it even more confusing. 

I have heard that putting in ridiculous limit sell orders keeps brokerages from being able to lend shares. Maybe we all should have done that. 

 
ghostguy123 said:
I guess I just don't understand how that works.

I know you can short a stock and make money if the stock goes down and then you exit.  Apparently I don't understand how you can manipulate the stock price doing that.  
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Selling a million (or 9) shares moves the needle.

If you’ve seen Trading Places, Dan and Eddie basically did the same thing. They sold orange contracts high and then bought contracts way low after the bad news. They didn’t own orange contracts before they sold them but that’s why they had to buy later so they could settle and bankrupt the Dukes who weren’t able to settle their contracts. Now Dan and Eddie were at least not spreading false info, they just had the crop report.

 
ghostguy123 said:
I guess I just don't understand how that works.

I know you can short a stock and make money if the stock goes down and then you exit.  Apparently I don't understand how you can manipulate the stock price doing that.  

I was under the impression 9 million shares were sold all at once.  Again, if they didn't own the stock, how were 9 million sold
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Because the brokers had them.

 
Otis said:
Chet makes a quick day trade and orders a Ferrari 
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@chet = https://www.bing.com/images/search?view=detailV2&ccid=xqLFMnnr&id=31375DC34A54A3F8AA14C5DD09E4206A772D932D&thid=OIP.xqLFMnnr1rAH_B0AbYLrugHaE8&mediaurl=https%3a%2f%2ficdn5.digitaltrends.com%2fimage%2f2019-ferrari-portofino-review-7501-1920x1280.jpg&exph=1280&expw=1920&q=ferrari&simid=608022568431783597&ck=D014CA950670708883854441EAD83064&selectedIndex=44&ajaxhist=0

My poor life  :bag:

https://www.bing.com/images/search?view=detailV2&ccid=irkfAIve&id=CD0DB168B2BDC4FE22223BCA59ACD61441BFE191&thid=OIP.irkfAIved7epQNR80w9vGAHaEo&mediaurl=https%3a%2f%2fbarnfinds.com%2fwp-content%2fuploads%2f2019%2f01%2f010119-1978-Chevrolet-Chevette-Scooter-1.jpg&exph=750&expw=1200&q=chevy+chevette&simid=608022611398561383&ck=7915E6D45918EA5681DEBCBADC9FD573&selectedIndex=8&ajaxhist=0

https://www.bing.com/images/search?view=detailV2&ccid=C%2fTIvYAe&id=FD8E1ED4D6F59CB927B89D6851C0FF614501DEDF&thid=OIP.C_TIvYAez1-_LmyA74ZZAwHaFJ&mediaurl=https%3a%2f%2fcdn.bringatrailer.com%2fwp-content%2fuploads%2f2018%2f08%2f1978_ford_pinto_cruising_wagon_1536937702c47ad07IMG_2640.jpg&exph=1310&expw=1882&q=ford+pinto+for+sale&simid=607998636869158889&ck=97B8E059603C790C62C6F6FE748A431F&selectedIndex=6&ajaxhist=0

 
I don't have the VWAP (volume-weighted average price) from when the short attack started. But I think someone here said the VWAP for today was in the $7s. So while the stock dropped to sub 5 quickly, let's assume the average share price that they sold 9 million shares was $7. So for every $1 below $7 that they purchased shares at, they've made a $1. 

 
sporthenry said:
Well shorting the stock consists of you selling stock that you don't own. So where do the shares come from? They're borrowed from you or I. An institution will lend someone our shares which will then be sold to someone. So in theory, you could own my shares or I yours. And they essentially just created new shares. So we would both 'own' the same security but the short seller would be on the hook for the other side of one of those transactions. I have a feeling that will either make sense or make it even more confusing. 

I have heard that putting in ridiculous limit sell orders keeps brokerages from being able to lend shares. Maybe we all should have done that. 
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Soooooooo do rich people just do this all the time to get a lot richer?   If not, why not?

 
I understand how shorting works.  What I don't understand is how placing a short can drop the price of the stock.  

 
ghostguy123 said:
Soooooooo do rich people just do this all the time to get a lot richer?   If not, why not?
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Well it's a bit skeazy / sleazy to do. It will only really work on lower volume stocks. You'd need a Fed balance sheet to do it on AAPL or TSLA. You can get burned doing it. But there are probably a lot of wealthy folks who do this on both sides. The same folks who pump a stock are also likely to be the ones who lead a dump. They just play with stocks with irregular volume. I don't think it's too scalable so major HFs likely can't run a strategy based completely off this although I'm sure some do stuff similar to it. 

 
sporthenry said:
Well it's a bit skeazy / sleazy to do. It will only really work on lower volume stocks. You'd need a Fed balance sheet to do it on AAPL or TSLA. You can get burned doing it. But there are probably a lot of wealthy folks who do this on both sides. The same folks who pump a stock are also likely to be the ones who lead a dump. They just play with stocks with irregular volume. I don't think it's too scalable so major HFs likely can't run a strategy based completely off this although I'm sure some do stuff similar to it. 
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If it only really works on lower volume stocks how did it work here?  Wasn't there a crap ton of shares being moved for days now?

 
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rascal said:
I understand how shorting works.  What I don't understand is how placing a short can drop the price of the stock.  
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When you dump 9 million shares in a period of less than a minute, the share price will plummet due to too much supply and insufficient folks willing to pay top dollar for it.  As fewer and fewer folks will buy, the price goes down until a floor of some sort is hit where folks are willing to pay to consume the shares being sold.  Once the share price has been knocked way down and they've off-loaded the 9 million shares they borrowed, they commence to start buying them back at the now lower prices as the demand for buying stocks was filled by folks buying 9 million shares.

 
rascal said:
I understand how shorting works.  What I don't understand is how placing a short can drop the price of the stock.  
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Well the average daily trading volume on CYDY is 7.8mn. I think someone in here said they unleashed 9 million shares. So you essentially flood the market with too many shares and buyers evaporate. It shows that the buyer base isn't as deep as we thought which isn't all that surprising given it's OTC and run up this far. Part of why an uplisting is important. 

But shorting a stock, especially in this size, floods the market. It'd be like 9x Chet selling all his shares. The market can't absorb it. Then it also trips a ton of sell limit orders which further perpetuates the problem. Heck, they probably only needed to sell 3-4 million and let the limit orders do the rest. 

 
adonis said:
When you dump 9 million shares in a period of less than a minute, the share price will plummet due to too much supply and insufficient folks willing to pay top dollar for it.  As fewer and fewer folks will buy, the price goes down until a floor of some sort is hit where folks are willing to pay to consume the shares being sold.  Once the share price has been knocked way down and they've off-loaded the 9 million shares they borrowed, they commence to start buying them back at the now lower prices as the demand for buying stocks was filled by folks buying 9 million shares.
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So they sold 9 million shares then had to buy 9 million shares.

Why wouldn't this just raise the price right back up?  Or did they count on a lot of other people getting scared and selling dropping the price even further

Edit....yeah tripping a lot of stop loss orders I guess would force a lot more selling

 
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sporthenry said:
Well the average daily trading volume on CYDY is 7.8mn. I think someone in here said they unleashed 9 million shares. So you essentially flood the market with too many shares and buyers evaporate. It shows that the buyer base isn't as deep as we thought which isn't all that surprising given it's OTC and run up this far. Part of why an uplisting is important. 

But shorting a stock, especially in this size, floods the market. It'd be like 9x Chet selling all his shares. The market can't absorb it. Then it also trips a ton of sell limit orders which further perpetuates the problem. Heck, they probably only needed to sell 3-4 million and let the limit orders do the rest. 
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Then you also time it with a negative article accusing the company of misdeeds and you're into an orchestrated short sale territory combined with propaganda designed to encourage more investors to doubt the stock further weakening folks desire to invest in the company, lengthening the time the shares stay at a reduced price.  So it was really a 1-2 punch today, with the flood of sold shares, then directly after with the negative press accusing the company and its leadership of trouble.

 
rascal said:
I understand how shorting works.  What I don't understand is how placing a short can drop the price of the stock.  
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I think maybe we are both stuck on the idea that this is.........wrong, and shouldn't be how share price works.

I guess legal corruption is hard for some of us to understand.

 
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ghostguy123 said:
So they sold 9 million shares then had to buy 9 million shares.

Why wouldn't this just raise the price right back up?  Or did they count on a lot of other people getting scared and selling dropping the price even further

Edit....yeah tripping a lot of stop loss orders I guess would force a lot more selling
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From what I was seeing the stock price was starting to climb back up and then the report came out accusing the company of all sorts of things, and the share prices dropped again.  It's a time of uncertainty for the company, and with such a huge drop in share prices suddenly, combined with a lot of negative accusations against the company, the demand was suppressed to a sufficient degree to keep the share prices from increasing much.

Happy to have someone with more knowledge than me on this correct me.

 
ghostguy123 said:
If it only really works on lower volume stocks how did it work here?
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The average volume on CYDY is 7.8 million and that is after elevated volumes the past week or so. They unleashed 9 million so a day's worth in an hour. I guess the other issue is that it isn't a widely followed stock with an institutional base to support it. If someone tried doing this to BLMN, it may get you $0.50-$1 before someone would step in. But given this stock has run up 5x in a few weeks, they likely knew a lot of folks were jittery. Still OTC and while there are hints there is institutional buying, still not big enough to support it throughout all this. 

The attack also started at noon which is also after the Europe market is closed. I could be way off base but given this stock runs up in the pre-market, makes me think it's being driven by an investor in Europe so maybe they attacked it when they weren't trading. Could be wrong there but just a hypothesis. 

 
Ok, think I understand it.  Why the ftc allow this?  Or is it only those who sell that are actually losing money (i.e. us average Joe's) and therefore they don't care?

 
ghostguy123 said:
I think maybe we are both stuck on the idea that this is.........wrong, and shouldn't be how share price works.
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If there was collusion, and a smear campaign to drive prices down and keep them down, it's likely it was illegal.  If there was no collusion between the shorters (unlikely) and the views in the article that was released RIGHT when all this happened were legitimate and not fraudulent, then it was likely legal.

Sure seems there was collusion in shorting, and the article was just too well timed in conjunction with the huge shorts with a lot of poorly sourced innuendo to be legitimate.

 
adonis said:
Then you also time it with a negative article accusing the company of misdeeds and you're into an orchestrated short sale territory combined with propaganda designed to encourage more investors to doubt the stock further weakening folks desire to invest in the company, lengthening the time the shares stay at a reduced price.  So it was really a 1-2 punch today, with the flood of sold shares, then directly after with the negative press accusing the company and its leadership of trouble.
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Yeah that is usually the MO. I'd assume the price action initially was as good as they could have expected and likely covered a lot to start with. Then release that piece to drive it down further. Stock didn't completely crumble. Citron's piece was pretty fluff so not sure he is going to ride that short as long as Valeant. Given it seemed to find support at $5 and just ran to $10, I doubt they'll stay in the short very long. 

 
So, would it be fair to say that this incident today probably doesn't affect the future price?  Say 6 months from now or a year from now?

If another company buys them out it sure might.  Maybe that is who shorted the #### out of it.  

 
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adonis said:
If there was collusion, and a smear campaign to drive prices down and keep them down, it's likely it was illegal.  If there was no collusion between the shorters (unlikely) and the views in the article that was released RIGHT when all this happened were legitimate and not fraudulent, then it was likely legal.

Sure seems there was collusion in shorting, and the article was just too well timed in conjunction with the huge shorts with a lot of poorly sourced innuendo to be legitimate.
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I mean Citron was likely one of the shorters, who released the report. I don't know where the line crosses into illegal. I'm sure culpepper and a few others were talking to Citron and convinced him to join. 

Like I said when we discussed Portnoy, I think this all would be cleared with greater disclosure. Anyone talking their book should be forced to disclose when they bought or sold. 

 
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