IIs & Shorters18 Apr 2025 17:40
My take on Two points few have been expressing here repeatedly:
1. Why IIs are not buying if the company is really that cheap? Answer is it is not their business model. They don't get into gutter fights with shorters to shore up a company's sagging SP. If something goes wrong they can't justify to their management. Their jobs will be in line. If some PI's lose money it is not skin off their noses. As a matter of fact the shorters are their tribe, birds of same feather . It has to be an enterprising investor / company that could step in if they see an opportunity.
2. The situation is tailor made for shorters. They see a good part of the investors are nervous, what with the suspension, audit and so on. And many are weak hands who got into make a quick buck with the 35p carrot dangled. It is a happy hunting ground for the shorters! They lead a coordinated attack to hoover the shares (what a graphic description this is) from weak hands. They have the bots to do their job. Bear with me an example.
Let us say the SP is 22p. The bot dumps 100k shares in tranches. It also has 80k buys in a related account at lower prices. 20k weak hands are sucked in. The bot still has 80k from original +20k hoovered. It lost 20k to new weak hands who thought they have found the bottom. The price has come down to 20p now. And now the bot repeats the process to get down to 18p and so on. This could go on till a strong hand appears to accumulate whatever is thrown in and push the SP higher. Then the shorters give up.
This shorting cycle can happen many times in a day, with the same shares bought and sold many times. So the volume traded in a day is not really the true picture.
I must be treading on a few impatient toes with my drivel! I don't intend to trouble you with more posts till Tuesday. Happy holidays & good luck with your investments!
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