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Playin' the players (pointers inside)

Posted by: SenJohnBlutarsky on May 14, 07:38 in response to forlorne's post How about today's PIKAC? Apparently 30+ people think its...

People could be buying or covering PIKAC for a number of reasons, and the predicted delist value has relatively little relevance to that trading.

At Delta House, we figure it's mostly covering. Not everyone can park millions of dollars in a stock for a few weeks (others have billions stranded in low-interest cash); plenty of cash-short players properly perceive a better prospect for getting the cash (including cash that is "stranded" because short profits are not available for investment until covered) and directing it toward a better short-term move.  The one percent commission can be a reasonable price for liquidity.

When that covering begins to move the price, some investors may buy -- even some who are convinced PIKAC will eventually deslist below the current price -- and figure they'll ride the acute wave for at least a brief period.

This concept also may explain otherwise inexplicable movements in CelebStocks, whose gains (or losses) are in many cases reliably predictable to the penny, several weeks from adjustment but whose trading sometimes runs against the guaranteed future.





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