Lots of different theories floating out there as to what happened this last week. I think Babjak1 was closest, but she didn't carry it far enough.
The way I see it is (Tom) owned a slug of shares (5mill) and was in a bind for cash. He knew if he blew them out that it would totally destroy the SP, so he talked to they BOD as to what to do. They came back telling him to contact (Jack), who was in the market for some more. Once they got talking about it, Tom admitted that he hoped to average at least 50 cents, as that is what he paid for them in that PP back in Dec 07. Jack replied that if he could get them for 50 cents him and a couple of buddies were in the market for as many as 8 mill shares. They then agreed that if Jack would guarantee a minimum of 50 cents they would blow them out the way they did, as it would take out a huge number of stop losses along the way, immediately drive the SP down to the 50 cent level, Give Tom his minimum price and allow Jack and his buddies to accumulate all the shares that they thought was going to take all summer to accumulate.
They miscalculated. There were a huge number of stop losses that were hit before the price dropped drastically, but unbeknownst to Jack and his buddies, There were an even larger number of supposedly broke retailers that were sitting in the wings and waiting for just such a drop. By the close Tom had only divested a third of his holding and was smiling as he was far above his minimum price. Jack was doing ok too. They didn't get them for 50 cents, but .65 was not bad.
By the following morning, Tom was still bound to get rid of the rest of his holding, and it looked like the SP was actually going to rise while he was doing it, but shortly after the open, a lot of recent buyers paniced and joined the selloff. Also however, by then there were also a lot more long term holders that had first divested themsleves of whatever they could and were right there buying along with Jack and his buddies. It took most of the day for Tom to get rid of his position and by days end it was all over.
Tom was quite happy, as he got out better than he expected. Jack and buddies would have liked to see the SP down to .50, but were content with what they got. I and a whole lot of others here feel good as we scored good at the bottom of the dip and the SP is on the rise again. I guess the losers were the ones who maintain a policy of always having a stop loss in place, but how many were there? I know of a couple that had a stop loss in @ .70, but managed to buy back in @ .65.
I still say we should not worry about the seller(s). They are gone. The important thing to you and I as holders is the amount of buyers that were there to take this stock. For this company to be able to absorb 15 mill shares in todays market, should indicate where we are going as this economy finally starts on the mend.
Regards
K
