A lot of people were exuberant over the recent DCIX explosion in price. Many people witnessed the same thing last year with DRYS. Why, how, could a shipping stock in Greece reach of a high of 700% in one day on no significant news, with a terrible balance sheet, then follow through on Monday by going up another 200% from its close? I’ve compiled an easy to read break down of the underbelly of this stock. There is no technical analysis or boring hard to grasp concepts this time, because the answer is simple: greed and legalized fraud. Kalani creates an artificial short squeeze, then exercises options for shares TOPS, DCIX, DRYS and dumps them on the public.
I’ve taken key excepts from a book written 100 years ago, written by one of the greatest traders in history, Jesse Livermore, showing him doing the exact same thing.
Drys float was reduced to 300 thousands shares, enough that it can be manipulated by Kalani so they can dump shares and make them rich, all legally. They do this over and over, creating a casino, attracting speculators and gamblers. Many unsuspecting people get ruined in the process though. You see it in the comments on seeking alpha and ihub. Most of the comments are fake trolls, but you can see the genuine ones.
Here is an excerpt from the book, “Reminiscences of a Stock Operator”
This book was written 100 years ago by Jesse Livermore’s alias. We see today the exact thing happening with these shipping companies. Things never change on the stock market because human nature will always stay the same.
One day the foremost member of the Imperial Steel syndicate, acting for himself and associates, came to see me. They wished to create a market for the stock, of which they controlled the undistributed 70 per cent. They wanted me to dispose of their holdings at better prices than they thought they would obtain if they tried to sell in the open market. They wanted to know on what terms I would undertake the job.
I let my man know my mind and he called at my office to talk the deal over in detail. I told him what my terms were. For my services I asked no cash, but calls on one hundred thousand shares of the Imperial Steel stock. The price of the calls ran up from $ 70 to $ 100. That may seem like a big fee to some. But they should consider that the insiders were certain they themselves could not sell one hundred thousand shares, or even fifty thousand shares, at $ 70. There was no market for the stock. The price was nominally $ 70, but I could not have sold one thousand shares at that price. I had no evidence of even a moderate demand at that figure or even a few points lower.
As soon as I had a line on these points I quietly took all the stock that was for sale at $ 70 and higher. I didn't have to buy very much stock. Moreover, I knew that the right kind of advance would bring in other buying orders and, of course, selling orders also………………
I didn't give bull tips on Imperial Steel to anybody. I didn't have to. My job was to seek directly to influence sentiment by the best possible kind of publicity. ……………..
…………But what I meant was that the tape did all that was needed for my purpose. As I said before, the reputable newspapers always try to print explanations for market movements. It is news. Their readers demand to know not only what happens in the stock market but why it happens. Therefore without the manipulator lifting a finger the financial writers will print all the available information and gossip, and also analyse the reports of earnings, trade condition and outlook; in short, whatever may throw light on the advance……………
At the same time I realize that the best of all tipsters, the most persuasive of all salesmen, is the tape. When I had absorbed all the stock that was for sale at $ 70 and a little higher I relieved the market of that pressure, and naturally that made clear for trading purposes the line of least resistance in Imperial Steel. It was manifestly upward. The moment that fact was perceived by the observant traders on the floor they logically assumed that the stock was in for an advance ……..the extent of which they could not know; but they knew enough to begin buying.
In due course the traders' purchases ceased and the price stopped rising. As soon as that happened there began the selling by disappointed bulls or by those traders whose reasons for buying disappeared the instant the rising tendency was checked. But I was ready for this selling, and on the way down I bought back the stock I had sold to the traders a couple of points higher. This buying of stock I knew was bound to be sold in turn checked the downward course; and when the price stopped going down the selling orders stopped coming in.
I then began all over again. I took all the stock that was for sale on the way up— it wasn't very much and the price began to rise a second time; from a higher starting point than $70.
All I had to do after that was to repeat the process; alternately buying and selling; but always working higher. Sometimes, after you have taken all the stock that is for sale, it pays to rush up the price sharply, to have what might be called little bull flurries in the stock you are manipulating. It is excellent advertising, because it makes talk and also brings in both the professional traders and that portion of the speculating public that likes action.
It was a safe enough profit, for I had a market for all I wanted to sell. The stock would sell higher on judicious manipulation and I had graduated calls on one hundred thousand shares beginning at $ 70 and ending at $ 100.
Kalani bought, or took the option to buy (excerpts from SEC filing, and made easy to understand)
(We need money now)
Warrants (options to purchase from the company as opposed to a broker) 6,500 Series B-1 Convertible Preferred Shares, priced at $1000 each convertible into 7$ per common share. US$6.5 million (option)
Preferred warrants to purchase 140,500 newly-designated Series B-2 Convertible Preferred Shares convertible into common shares, convertible in $7.00. These are basically options but direct from the company Priced at $1000 for each share (140 million)
(The Series B-2 Convertible Preferred Shares are convertible at the option of the holder into share of our common stock, par value $0.01 per share, or "common shares," at a fixed conversion price of $7.00 per common share, subject to certain adjustments, and PROVIDED THAT on the date of conversion the trading volume of our common shares on The Nasdaq Global Select Market is not less than 15,000,000 shares)
Alternatively, at the option of the holder, the Series B-2 Convertible Preferred Shares may be converted at a price equal to the higher of (i) 92.25% of the lowest volume-weighted average price of the common shares on any trading day during the five consecutive trading day period ending and including the trading day immediately prior to the date of the applicable conversion date, and (ii) $0.50
The above clause is for the possibility that the share price doesn’t reach $7.00. That way DCIX and Kalani can squeeze whatever they can.
So, essentially DCIX needs money, but nobody wants the stock because they have a history of doing reverse splits and massive share dilution. No underwriter is going to buy the stock to sell, so this is where Kalani comes in. Kalani is a speculator, just like Jesse Livermore with Imperial Steel. Kalani is given the option to buy stock for $7.00 only if the volume increases to 15 000 000, which gives him an incentive to want DCIX’s share price to increase with heavy volume.
Just like major shareholders of Imperial Steel employed Jesse Livermore to create a market so they could sell, DCIX is employing Kalani, under the guise of being a shareholder, to create a market so they can raise money for their struggling company.
Thanks for reading until my next article keep it profitable,