A Hypothetical Story about Stock Manipulation on the Venture
posted on
Oct 16, 2014 07:35PM
This is a hypothetical story and I will not confirm that I know such an individual and will not comment any further on this. I will not back this up, so consider it just as a story that might shed light on manipulation. Regardless, don't kid yourself, this does happen. If this is too speculative and inappropriate, please remove this post.
Here is a hypothetical story. Consider an individual, for the sake of giving a name, let's call him John Smith. John has been a stock manipulator for many years, and a few years ago he was banned from trading on the venture exchange for shady practices. He is no longer banned and is now back in the game. John has many connections and has access to all kinds of information. Consider a situation such as this. John knows of a group of manipulators that has found a gem of a stock for what they do. They realize information will not be made public for various reasons. They set a timeline on when they would expect any potential news releases of significance, and stick to it. They base their "game" on the emotions of investors. The lack of information results in silence, which results in uncertainty, which results in fear that something must be wrong.
Perhaps the group decided some time ago to wait for a SP pop then shorted the stock to make money, and continued to manipulate the SP lower. The goal was to reduce the SP to $0.90. The other goal was to accumulate many shares at low prices. Once their goal is achieved ($0.90), they bail (cover) on shorting, have accumulated many shares, and will then manipulate the SP up with a new goal (SP) and sell their shares at that point. They then set new goals for their "game" or move on to other stocks, depending on the circumstances.
How emotions can come into play? For example, ask any of the investors when the SP was close to $3 if they would ever sell at $1. The answer would be "are you crazy?", however it appears that many have done just that.
As an aside, consider that sometimes these manipulators do not just play their game to make money, but they do it in spite of individuals at a company and to crush a company. Consider John looking at a junior mining company, and deciding to crush it due to a conflict with a director. The SP gets manipulated down significantly, even though the company has great potential. Financing is no longer available and the company is in significant trouble. Meanwhile the manipulator sits back, has a drink, and has a big smile. Many of the junior mining companies have been crushed by the market and price of gold, but this was crushed well before that, while other companies were thriving.
Might just put perspective on who is in charge of a SP on the venture at various times.
What can be stronger than manipulation? Significant news (revenue) of course.
Here's hoping that tomorrow this reversal continues.
Quan