What is the possibility that 'painting the tape' is responsible for our recent rise in price? Thursday, the 18th, we had a high of .88. Friday we had a high of .75. It does seem plausible with the Warrants expiring today, and no follow up news on rumours. Any thoughts are welcome.

BK

From today's WSJ:

Painting the tape. In what also is called "banging the close," managers run up the price of what they already own.

Changes in Nasdaq's trading rules have made this tactic rarer. But it may not have disappeared. Consider the case of American Technology Corp., a San Diego-based producer of audio equipment. On Dec. 31, 2007, the company's total market value jumped to $77 million from $58 million in a single day.

Why? The firm announced no news that day. Robert Putnam, Atco's head of investor relations, says: "All we can guess is that some institution was doing something to make its statements look better" -- in other words, buying extra shares at an artificially high price to boost the other shares it owned. Atco's stock closed at its high for the day, up 33% from the day before -- a pretty peculiar move for a stock that lost 35.5% for the year.

A fund that does this with a few dozen stocks would not only pump up its return, but also boost the fund manager's revenues, which are based on the assets it manages. Next, the fund would bail out right after the New Year. On Jan. 2, 2008, Atco dropped more than 10%; it has lost roughly 80% for 2008 as a whole.

Painting the tape is a one-day wonder. Historically, 80% of all U.S. stock funds and 91% of small-company funds have beaten the market on the last trading day of the year -- and roughly two-thirds have given most of that gain right back on the first day of the following year. "So we know how investors can avoid losing money," says finance professor Dan Bernhardt of the University of Illinois: "Don't buy small stocks or a small-cap fund on Dec. 31, and don't sell on Jan. 2."