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Author Topic: Where's the money
jwlipa@earthlink.net
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Some people on this board have suggested that companies are dumping more stock in the market. This would be counter productive. Companies are allowed to borrow or trade their stock value. if a company nas 1,000,000,000 shares issued and the price is $.001 they have $1,000,000 to borrow with. If they use pr, and get the price to $.005 per share they have $5,000,000 to borrow. To increase the shares to 5,000,000,000 would get them the same money, but investors would rebell and get out dropping the price per share, so they would still not have that much money.

We have all been buying stocks for months and the price we paid was higher, for most stocks, than it is today. Would we be selling it today and make a profit, no. We are frustrated and some are selling their shares to stop the losses any more. We hear many good PR's and the price of a stock goes up and within a short time, the price is below where we bought it for.

Now let's look at the MM's. Up until 1 April, they did not have to own stock because they could sell short and when the price went down, they could replace them with cheaper shares and pocket the difference. That is how they made their money. Let's look at where they are today. They cannot sell short after 1 April. They have to buy huge quantities of stock before 1 April to cover their sales. Are they going to buy stock at the price it was on 1 February and pay market prices? This would be very costly and it would take a long time to cover their costs. If you buy the market down with short selling now, it does not cost you anything. As a matter of fact thats how they have been making their money. Now that they have gotten the price down to 50 0r 60% of its value, they can use the money they made on short selling to buy the stocks they need, and they can hold the price until all MM's have purchased their stock. As soon as they have their stock, they want to make money. If they keep the stock at a low price, they don't make any money. If they let the price go back where it was before, their stock is now worth double. Now instead of making money keeping market prices down, they make money like us when stock prices go up.

I think this was why the date was changed, because it would be a tremendous burdon on them to buy all of the stock at market prices. Since they are being demanded to change their way of doing business, consessions were made to them so they would not be finacially devistated.

The only question now is do they still short sell until 1 April or once they have amased the stock required will they start doing business the new way.

People that can afford to hold onto their stocks will make a lot of money, just like the MM's. People who have extra money can bank for the future. Those who bail out now are the ones that chase the stock price increases and buying stock making money while the MM's and others are buying at the bottom floor.

imo, but it follows with the PR's not holding and a majority of stocks dropping in price. Look at the low volume stocks, they are not changing much in price.

GOOD LUCK TO ALL.

I hope my theory is right and if we do not bail out now and sale, the MM's will have to start letting the prices rise.


Posts: 51 | From: hayden, al | Registered: Nov 2003  |  IP: Logged | Report this post to a Moderator
glassman
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AND THE TRUTH SHALL SET YOU FREE--------
i agree and am betting a LOT of money on it-- it is happenning on the BIG BOARD TOO__
the NYSE MM's and Mutual fund managers are PISSED__that they have to conform to FAIR trading--- LOL

Posts: 36378 | From: USA | Registered: Sep 2003  |  IP: Logged | Report this post to a Moderator
   

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