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To
OTC Journal Members:
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Stock
Group Technologies, Inc (OTC BB: SWEB)- The Players Get Bigger |
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For those of you following StockGroup-
the situation we have been covering since a September introduction at $.19-
The company had a very unusual an exciting announcement on Friday.
StockGroup, which has been
carrying $1.23 million in convertible debt on its balance sheet, was able
to become completely debt free in one-fell-swoop by finding a large institutional
investor to take all the debt off its books.
The debt was converted in equity,
or shares of common stock with a cost basis of $.28 per share. All the
shares were purchased in a private transaction by a family of mutual funds;
specifically US Global funds.
This means US Global Funds
have purchased approximately 4.4 million shares of StockGroup with
a cost basis of $.28, and StockGroup no longer has any debt. It
is highly unusual for a traditional mutual fund to take a significant position
in a microcap stock in the low price range.
The stock continues to grind away
at the $.30 level at which it is stuck. Eventually it will break through,
and one day, probably when you least expect it, it will just pop to $.40.
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Memorial Day
Members' Forum |
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Lots of mail to share on my last
two editions- The May
18th edition on Naked Short Selling in the microcap arena brought many
comments that demonstrated readers were surprised this kind of activity
is allowed to go on. The May
21st edition with a recommendation to go long the QQQ's brought a lot
of agreement. Here are some comments.
On Naked Short Selling in the
MicroCap Market
David M: In your weekend article
"The OTC Rebellion" you noted that there are about 80 companies trying
to remove themselves from the DTC. Can you forward a list if these
companies to me or publish the list in some fashion. It would be
interesting, fun and possibly profitable to play some of these as they
get near or become remove/delisted from DTC. How would an individual
trader follow or get information on the timing of each company to become
delisted from the DTC.
OTC Journal: Go to www.nakedshortselling.com
for lots of information. Here is a link to a news release- at the end of
it is a list of companies that have either completed the process or are
attempting to. Click
Here.
Jerry: Now all
the short sellers will move to the islands to set up house. I can
not believe that our Protectors are allowing any short selling on a stock
under $5.00 per share. Our small companies employ most of the work
force. Did anyone tell the Protectors of our stock markets that we
need jobs to keep the economy moving? This is another scam that is
being allowed to be pushed on the small investor. Could it be that
a foreign country could be making a living by pushing our small companies
out of business and becoming wealthy at the same time? Why is it
taking the SEC soooo long to get the laws changed? The new law will only
help for a short time. If your company would come out with a new invention
their competition will sell them short to keep them from succeeding.
We need new inventions to move this economy out of the current gloomy economy.
Good Luck with the fight!
Anonymous: A GREAT piece. Short
selling has always been an Insiders tool in its operation. Few individual
investors have a level playing field with insiders. There are other,
less dangerous but also less profitable ways to invest on the downside
of a stock. I doubt that the playing field can be leveled for the II until
short selling is abolished or made greatly more fair. Thanks
May 21st Edition Suggesting a
Buy of the QQQ's
Adrian S: can't agree more
with you. I m also quite bullish, I believe the nasdaq will make higher
top in about 1 month, the market will pause for summer ( a brief but not
painful retracement), then it will resume its uptrend again for xmas rally.its
all about timing....
before the peak of 2000 rally
lasted 119 days then 131 days and then 384 days....(increasing number
of days)
after the peak of 2000...
every retrecement i.e. bear had a greater time span... i.e. 52 days,
118 days, 163 days and 190 days....
then after the october 02
low, the retrace for the bear only lasted 68 days. and the rally we are
into right lasted longer than the previous rally of 36 days....and as you
stated, we are making higher lows and higher highs....
to me, i see the october 02
low as a long term low....
i think you should consider
writing an article on timing.
and you should also not forget
BIOTECHS we are again in the 1999 craze, I see it coming there are many
indications and the bubble days are back with us.... funding, new clinical
trials, sars, cancer plays etc... the best is still coming.
OTC Journal: Adrian: I like your
observation on the Biotech stocks. I think biotech looks like it could
lead the next Bull Market. We are nearly through the "bottoming process".
The next true Bull Market will probably be established in October/November
barring any major cataclysmic events.
Pete M: like
QQQ because of the liquidity, many strike prices, and high premium.
Another way to play it in a bull or flat market is to sell an out of the
money put. Example- Sell the July 27 put at $1.00. This gives you
the obligation to buy the stock at 27 if it heads south but you keep
the premium regardless of where the stock goes. Your upside is only the
amount of the premium though. If it's assigned to you, you can then write
the call.
Another way is the write
the put and also buy the call as you recommend structuring the transaction
so you get the calls for nothing out of pocket.
Example- sell 10 July 27 puts for $100 ea or $1000, buy 8 July 28
calls for $1.15 ea or $920.
OTC Journal: Great Contribution Pete.
G: I'm short
the Q and short the market. The uptrend on the s and p has been broken
(20 dma). Not that confident in it, but we're way over bought and
the Vix is way low. if we hang here, I'd close it, but I think we're
going to drift down.
OTC Journal: G, you could easily
be right. That's why I recommended a stop loss at $27.25, where we would
break the uptrend line.
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