RE: Whats going on?19 Dec 2024 11:01
Pianoma – This is just a theory and a few thoughts on our falling price.
1) We currently have no buyers, so the share is adrift and will remain so until some materially important announcement is made.
2) Since the new CEO was appointed, no materially important announcements are likely until after he starts in January, and that does not mean it will be during his first few days. Hence, there is a window of more or less guaranteed no new buyers and no upward pressure on the price.
3) Our shorter is (largely) in at circa 12p, and at 3.11% of 845M is in for 26.5M shares, which is £265k profit per 1p move in price. They need it a fair bit lower to make any real money, so they are well incentivised to act and take advantage of this window of drift.
4) To lower the price, we need a seller who can adjust the volume as needed. You may have noticed that we have had some very low volume and circa 2M traded days.
5) I believe our shorter is trading to ease the price down while we are ‘adrift’. It is surprisingly easy to do in these circumstances.
6) Selling trades in the morning—all O trades—of higher than the (at that time) average ease the price down. If there are counter buys, a few larger (between 50k and 100 K) sell trades counter that effect and downward moves continue.
7) As the drift continues, our shorter can buy some of their earlier sales back at a marginally lower price, thus refuelling their stock volume for sale again.
8) They can do that day after day, possibly making micro profits, but even if they are making micro losses on those trades, they are massively hedged in the profits from their much larger short at £265k per 1p movement
9) As our shorter has a huge gain to make, in contrast to the few quid market makers would make on our lowish volumes, we can reasonably assume that it is our shorter that is highly active in aggressively trading our price down and will continue to do so.
10) As the price continues to drift down, any potential buyers will continue to sit on the side, as they can expect a lower price ‘tomorrow’. Hence, the drift continues, and the shorter can continue to act and maintain that drift.
11) A materially significant RNS announcement is required to break this cycle.
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