CYNK Social Media III: There Are NO Bubbles
How did a 30 year stock market veteran like Laresca get duped so bad, by getting caught in a short squeeze, that he lost his job?
Greed got the best of him, as he assumed that this was a standard pump and dump, and he jumped in (not taking into account the potential for further upside manipulation by the perps.)
Trapping the Shorts
Another theory emerged on July 10, as Cynk hit $21.95 in intraday trading and its valuation eclipsed $6 billion. Paulo Santos, an independent trader from Portugal, wrote about the stock in a blog post, on the website Seeking Alpha, that quickly went viral on Wall Street.
Santos described a modified pump and dump: Cronies controlling virtually all of the shares had set a trap for short sellers by lending them stock, he posited. After bidding the price up further among themselves, the theory went, they recalled the shares, forcing the shorts to pay a price of their choosing.
After a two week SEC trading halt, CYNK sank %86 to $2.01, then did a 150% dead cat bounce to around $5!!
The SEC will investigate while Zero Hedge reports here, and Pumps & Dumps op-eds here:
It has long been unfathomable to us that stock traders would allow themselves to be used as marks, parlaying their hopes of making a few dollars into windfalls of millions for the unscrupulous.
The Nattering One muses... Momentum players and market makers say "wow, look at that chart"... what they should say...
The chart you are looking at does not represent a company. Nor does a chart represent the people involved, sales, assets, liabilities, revenues, or future upside or downside potential.
The chart is merely a picture, snapshot or image in time, which reflects at that given moment, what the buyers and sellers in the market feel about a company.
Santo's analysis on Seeking Alpha is correct. This was a modified pump and dump where...
the con men controlled virtually all the shares and were going to make any short sellers pay dearly by bidding up their shares, and keeping them in short supply (no pun intended).
Since insiders controlled the shares being lent and sold short, they also controlled the pricing short sellers need to pay just to keep their positions open. If they maintain control over the process, they can rack up massive short borrowing fees.
Laresca probably bought short options that expired the following month. Having fallen into the trap, and due to the SEC stepping in late with a two week halt, he had to carry the massive borrowing fees.
Add to PT Barnum's: "There's a sucker born every minute", Forrest Gump's: "Stupid is as Stupid Does", Ron White's: "Yon Can't Fix Stupid"....
Summer's Law (Larry Summers): "There are IDIOTS, look around."
Rinse and repeat after me, aside from the departed M.J.'s now 31 year old chimp Bubbles, there are no bubbles... below CYNK's only listed employee Marlon Luis Sanchez speaks out.
Greed got the best of him, as he assumed that this was a standard pump and dump, and he jumped in (not taking into account the potential for further upside manipulation by the perps.)
Trapping the Shorts
Another theory emerged on July 10, as Cynk hit $21.95 in intraday trading and its valuation eclipsed $6 billion. Paulo Santos, an independent trader from Portugal, wrote about the stock in a blog post, on the website Seeking Alpha, that quickly went viral on Wall Street.
Santos described a modified pump and dump: Cronies controlling virtually all of the shares had set a trap for short sellers by lending them stock, he posited. After bidding the price up further among themselves, the theory went, they recalled the shares, forcing the shorts to pay a price of their choosing.
After a two week SEC trading halt, CYNK sank %86 to $2.01, then did a 150% dead cat bounce to around $5!!
The SEC will investigate while Zero Hedge reports here, and Pumps & Dumps op-eds here:
It has long been unfathomable to us that stock traders would allow themselves to be used as marks, parlaying their hopes of making a few dollars into windfalls of millions for the unscrupulous.
The Nattering One muses... Momentum players and market makers say "wow, look at that chart"... what they should say...
The chart you are looking at does not represent a company. Nor does a chart represent the people involved, sales, assets, liabilities, revenues, or future upside or downside potential.
The chart is merely a picture, snapshot or image in time, which reflects at that given moment, what the buyers and sellers in the market feel about a company.
Santo's analysis on Seeking Alpha is correct. This was a modified pump and dump where...
the con men controlled virtually all the shares and were going to make any short sellers pay dearly by bidding up their shares, and keeping them in short supply (no pun intended).
Since insiders controlled the shares being lent and sold short, they also controlled the pricing short sellers need to pay just to keep their positions open. If they maintain control over the process, they can rack up massive short borrowing fees.
Laresca probably bought short options that expired the following month. Having fallen into the trap, and due to the SEC stepping in late with a two week halt, he had to carry the massive borrowing fees.
Add to PT Barnum's: "There's a sucker born every minute", Forrest Gump's: "Stupid is as Stupid Does", Ron White's: "Yon Can't Fix Stupid"....
Summer's Law (Larry Summers): "There are IDIOTS, look around."
Rinse and repeat after me, aside from the departed M.J.'s now 31 year old chimp Bubbles, there are no bubbles... below CYNK's only listed employee Marlon Luis Sanchez speaks out.
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