If people start to snap out of their hypnotic trance and your power to control the stock begins to fade you must go Nuclear.
For example, you just had an analyst day at a fancy hotel and the effects are waning, you must act more boldly so as to not get lost in the competition for attention. It is best if you do this through a surrogate, such as an investment bank. If you dangle the carrot of being the lead book-runner for a large equity offerings in front of a new bank that is not currently covering your stock, you can enact a quid pro quo situation. Your goal is to have someone else toot your horn with an absurdly bullish initiation report. In bull markets sell side reports will have an asymmetrically positive effect on stocks, as the negative ones are usually summarily dismissed.
Authority: TherapeuticsMD. As TXMD’s stock price slipped from $9 to $5, they had an analysts day consisting of a panel of “key opinion leaders” with conflicting interest pumping their end market and potential product pipe dreams. As the effects of this waned and the stock slipped even further from $5+ to $3.80 in short order, FBR Capital Markets came out with an incomprehensible sell initiation report that contained zero new information or insights, or near term catalyst cited, with a headline grabbing $34 price target. That price target is full 9x higher than the previous trading day’s low. This caused a 30% pop in the stock the next day, which was good for almost $200 million manifested market capitalization. Insiders were steadily cashing out and getting desperate to maintain the façade, so they had to resort to bolder and bolder moves. Take a page from their playbook and when your hype is fading, you must go nuclear and pull out all the stops.
For example, you just had an analyst day at a fancy hotel and the effects are waning, you must act more boldly so as to not get lost in the competition for attention. It is best if you do this through a surrogate, such as an investment bank. If you dangle the carrot of being the lead book-runner for a large equity offerings in front of a new bank that is not currently covering your stock, you can enact a quid pro quo situation. Your goal is to have someone else toot your horn with an absurdly bullish initiation report. In bull markets sell side reports will have an asymmetrically positive effect on stocks, as the negative ones are usually summarily dismissed.
Authority: TherapeuticsMD. As TXMD’s stock price slipped from $9 to $5, they had an analysts day consisting of a panel of “key opinion leaders” with conflicting interest pumping their end market and potential product pipe dreams. As the effects of this waned and the stock slipped even further from $5+ to $3.80 in short order, FBR Capital Markets came out with an incomprehensible sell initiation report that contained zero new information or insights, or near term catalyst cited, with a headline grabbing $34 price target. That price target is full 9x higher than the previous trading day’s low. This caused a 30% pop in the stock the next day, which was good for almost $200 million manifested market capitalization. Insiders were steadily cashing out and getting desperate to maintain the façade, so they had to resort to bolder and bolder moves. Take a page from their playbook and when your hype is fading, you must go nuclear and pull out all the stops.
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