Market manipulation- how to identify it?
by shaya4 | June 2, 2015 11:46 pm
$ATNM has been on quite the roller coaster the last few days, and I’ve been reading up on market manipulation as a result. I am a newby to investing, but work in the field of databases and dashboards, so I recognize screwy data when I see it, but have no idea how to interpret in the context of stocks. I think the main Dr KSS comment thread is tired of the topic, but I hope a few of you will join me.
I found a fascinating article on short attacks:
http://seekingalpha.com/instablog/2918951-g-hudson/1026551-how-the-big-players-manipulate-the-stock-market[1]
NASDAQ just published historical short data for ATNM ending on 5/15
http://www.nasdaq.com/symbol/atnm/short-interest[2]
The really big $1,000,000 shorts started with settlement dates at the end of Feb, and the big price drop was intrasession Feb 5th & 6th. The shorts kept growing by 500,000 shares every 2 weeks after that- On the last date they were up to 2,526,000+. Granted, the price dropped $2.79 during that period which invites shorts, but is this normal behavior for a low volume stock?
Now there is one relatively big call left with expiration date of June 19 and strike of $2.5. It’s not a put, which is what I would expect with short attack, but I have very little visibility into very recent past options[3]- say the last 6 days.
There is a graph on Schwab’s options tab that shows the call/put ratio and on April 22 or so there was a huge spike- like 7.40- where all other dates were flat low values. What does that mean?
The big shifts in price keep happening right on the boundaries between normal sessions and pre/post sessions with a huge transaction that doesn’t show up on 1 day graphs, you have to look at 5 day graphs to catch them.
So what do you think- is the last few days of dropping like a rock on fairly good news a result of manipulation, short attack or otherwise?
What kinds of manipulation have you seen in other stocks?
- http://seekingalpha.com/instablog/2918951-g-hudson/1026551-how-the-big-players-manipulate-the-stock-market: http://seekingalpha.com/instablog/2918951-g-hudson/1026551-how-the-big-players-manipulate-the-stock-market
- http://www.nasdaq.com/symbol/atnm/short-interest: http://www.nasdaq.com/symbol/atnm/short-interest
- options: https://www.stockgumshoe.com/tag/options/
Source URL: https://www.stockgumshoe.com/2015/06/microblog-market-manipulation-how-to-identify-it/
With the huge options going on in $ATNM, 2,526,000+ If comparable to May 15, and the risks if the writers on the $2.50 strike get caught with the price too high, wouldn’t the writers have plenty of motivation to spend $60,000 to buy a hit job of bad, clumsy PR for a week to get that price down? There is plenty of disgust toward ATNM management being expressed on discussion boards and Twitter today. Quite a few mentioned expressing that disgust via emails to ATNM management.
I’m just really having trouble with the idea that a science company would have anything to do with oh so tacky (and tiny) Edge Media, LLC on the opposite side of the country. Edge does not have much web presence beyond a very bad 1 page site with few details, and a terrible Facebook page. Lots more social site exposure for the owner than business exposure for the PR firm. Wonder if she dates a hedge fund manager?
There is also ‘Edge Media Interactive,’ out of Fort Lauderdale, which looks small but more legit than the Phoenix company; they offer SEO, web development, ‘click based marketing,’ and so on. Interesting hypothesis about shorting, though apparently ATNM had used some kind of promotion company last year. Completely agree it’s backwards if the company is really doing it. It is as if the company’s scientists are working hard on getting products ready to test but there’s a marketing dept of bros who think the thing to do is take hookers and blow to potential investors!
Please follow up with what you find out about short interest. Herbalife is obviously not the only target of aggressive shorting! (Though they deserve it IMHO.)
I was really hoping you’d join me here. From what I’ve seen mining and micro cap biotech are the 2 favorite playgrounds for this type of action. I think what is getting my hackles up are the odd volume patterns- huge transactions moving the needle at strategic times to have max price impact with least visibility.
Problem with the other Edge is the name doesn’t match the newsletter- and their area of expertise doesn’t match either. They are all about the targeted, embedded web page ads – the annoying ones where you shop for something online and for the next 6 months every site you hit has ads for the product you shopped for? I love your analogy on the hookers and blow- it is exactly right. That is why I think 3rd party- and with millions in options play over the last 4 months it isn’t as unreasonable as some might think to buy enough time to get the options covered.
Red Chip clearly states ATNM paid them for 6 months of promotion, no mention of any middleman PR company. Also, while it is a bit uncool, it is nothing like the completely tacky Edge Media, LLC. I can see the fit there between a science geek buying a “research” PR firm service.
Turns out the report I liked so much at Microcap Research was also a purchased service. Much classier IMO than Red Chip or the newsletter company from yesterday- SmallCapIR.
Disclosure: The publishers of MicrocapResearch.com own shares of Actinium Pharmaceuticals (ATNM) bought in the open market and received compensation of $20,000 from an unrelated third party for our article and facilitation of investor awareness in the company.
That’s a pump and dump disclosure from Microcap Research. Companies have legitimate reasons to hire IR firms like RedChip, even firms that look kind of sleazy, because generating investor interest is a core business activity of public companies that require ongoing capital infusions… it’s not that different from what large firms do with visits to CNBC and presentations at investor conferences and having in-house IR staff who sweet-talk the mutual fund managers who call for info, though for small firms it’s often even more important because if they need to raise money by selling stock every couple years they can’t afford to have the stock price drop too much — but the only reason an unrelated third party hires a stock promoter is so they can drive the stock up to sell it in short order. Doesn’t always work, of course, but from what you’ve said it sounds like ATNM over the past year or so has probably both hired IR/promotional firms and has been targeted for pump-and-dump promotion.
And to reiterate, I know nothing at all about ATNM.
It is done to provide liquidity to sellers, not necessarily drive the price up. They usually own it much lower and/or have lower converts.
True, that could be a squishier kind of “pump and dump” — has there been insider or fund selling?
No insider selling that I could find but 2 smallish officer aquisitions and a big one on 5/7 to Sloan Kettering for 5,000,000 shares.
I have seen some suspiciously large transactions in millions of shares- for a Microcap with avg volume of 700,000 per day. Can’t dig them up right now- on conf call- but will later if it would help.
Thank you for jumping in!
On May 27 someone bought 10m shares. I don’t think it was an insider, no forms and they were very prompt filing the SK form, so my guess is institution. Institutional investors total shares at that point were 8m so a big fish took a bite.
The 2 officer transactions were actually dispositions, they sold more than they have left, quantity on one was 150,000 but it does not look odd. I don’t think this is insiders playing games.
here is one that was $60k that just went out.
SCS Websites has been compensated sixty thousand dollars for media services in relation to ATNM by Edge Media, LLC for a period of three days, starting on June 2, 2015. In addition, in some instances the Group and SCS Websites’s affiliates, officers, directors and employees may also have bought or may buy, or have sold or may sell the securities discussed in SCS Websites and may profit in the event of a rise in value of those securities.
This has also been part of a large paid promotion campaign. Not directly from company but a “third party” paying cash. I would love to know the line of payments. Something smells funny on this one. Reminds me of GALE and other paid pumps.
To summarize so far:
ATNM bought some PR and had recent good news, hoping for a rise
Sloan Kettering increased their stake 5/7 by 5m shares
A 3rd party may have bought some PR too- certainly to drive interest, possibly a rise
Extraordinary short action in the last 4 months involving millions of shares
An active call option expiring June 19 with a strike of $2.50
Historical pattern suggest that call could involve 3m shares
Price over $2.50 could expose call writers to loss of millions.
Sounds like a fascinating little clash of microtitans.
And this is why the site is called Stock Gumshoe! Okay, really it’s for Travis’ sleuthing, but nice work, shaya.
Here’s another possible piece of the puzzle. There is also an ‘Edge Media and Marketing, LLC,’ which appears to be a sole proprietorship which the guy runs out of his house in a Chicago suburb. (It is a nice house.) Though there is a FB profile, with no information or posts other than one from 2013 referring to a Social Media Conference in Chicago, there is no website or other online trace of this company, which suggests the proprietor is not very good at his job. Unless that job is a kind of marketing that depends on staying under the radar.
Thanks shaya4 for that ‘due diligence’ on $ATNM. I am long with purchases on 3/18/2015 at $2.96 and on 5/29/2015 at $3.97 now representing 1.8% holding in my portfolio. It will be interesting to see the price action around the call date of June 19.
I wish I was more sophisticated in the ways of the market to understand what has gone on here. Was this recent promotion connected, directly or otherwise, to the new offering announced today? Was the company behind it, or someone connected to Dr Frost, or a third party? If the purpose was to pump up the stock, it was very ham-handed, so was it possibly deliberately done that way in order to create doubts and drive the price down?
I guess we’ll never know. Obviously, this has nothing to do with the science of the company. But they will need more than that to succeed.
Micrcap Research disclaimer specified unrelated 3rd party hired them. I don’t think an agent acting for the company (PR firm) qualifies as unrelated, but not certain. I also found their ad very convincing, unlike IRSmallcap- also paid for by 3rd party, but immediately spotted as a paid ad by even unsophisticated posters on Yahoo.
Lots of players with conflicting motives. There are 3 big multi-million dollar investors who took a position within the last month. I am still convinced there were hedge funds, or some other investors, using options as a private piggy bank Feb thru May- or at least closed in that time frame. We’ll likely never know unless they answer your email. I hate not knowing, but greatly enjoyed the hunt and learned a LOT. Thank you for playing with me! If I could write fiction, this would be fun to turn into a murder mystery.
If you’re going to steal, think BIG: This morning I saw a pretty worthless article on spotting fake SEC filings- the only takeaway was if it wasn’t filed by the company, then verify before believing it. However, curiosity hit and a search on fake filings took me to this interesting blog:
http://www.thecorporatecounsel.net/blog/2015/05/fake-sec-filings-avons-unreal-tender-offer.html
Apparently in 2001 one charmer filed fake takeover documents on “General Motors, General Electric, AT&T, Hughes Electronics, AT&T Wireless, AOL Time Warner and Marriot International – for roughly $2 trillion in “Toks” stock. “. He was increasing promotions on his scam even while the SEC was breathing down his neck. Off his meds or brass balls?
Shaya, I very seldom refer to SA however here is a manipulation story I ran across today: Synergy Shares Climb After Manipulation Arrests http://seekingalpha.com/article/3237486-synergy-shares-climb-after-manipulation-arrests Best2YA-Ben
Thank you Ben, that was interesting. i will be watching eagerly for the results of that trial. I really want to look deeper into Iceland- from what I understand after the 08 meltdown they alone convicted their dirty bankers and bailed out individual victims hit hardest. I want so much for their recovery to be faster than everyone else’s. I’m no socialist, but I’m sick of corporate welfare at the expense of all the individuals and businesses that actually produce real worth and power the economy. We need to bankrupt and jail more white collar criminals- I think that just might help the economy more than anything else we could do.
Ham handed manipulation trick on $TRVN July 2, 2015: I didn’t see this myself, but a contributor to SA posted an article with a screenshot of a NASDAK after hours session where someone at the end of the session sold 1 share for $1, which created a big red 86% loss header throughout the 3 day weekend (the article claimed a $16,000 loss but looks to me like he misread the other transaction shown.). This technique didn’t seem particularly effective- $TRVN did close down 6 cents Monday, but so did about everything else from the Greek referendum.
http://seekingalpha.com/article/3305115-2-trepidatious-travails-tormenting-trevenas-tried-and-true