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posted by janrinok on Monday January 29 2018, @03:54AM   Printer-friendly
from the fetches-popcorn dept.

Short sellers are in Nirvana with these creatures that had surged by hundreds or even thousands of percent in days after they announced a switch to "blockchain" in their business model or added "Blockchain" to their name. Their shares are now crashing.

I have written about a number of these outfits and their crazy share-price moves and their silly stock manipulation schemes on the way up. Now, not much later, here's an update on how they're doing on the way down.

This is a true gem. On January 9, the SEC halted trading in UBIA shares, citing two reasons: "accuracy" in UBI's disclosures and very funny trading activity. This froze the share price at $22. The trading halt came 11 days after I'd lambasted the shenanigans by the company and its executives. On Tuesday (January 23), shares trading resumed – and have since plunged to $8.25.

What caused the surge was the December 15 announcement – a mix of gobbledygook, hype, and silliness, as I called it – that it had acquired a "Blockchain-empowered solutions provider," etc. etc. What was not in the announcement was that the acquired "assets" belonged to a Singapore corporation that is 95% owned by Longfin's CEO and chairman. This was disclosed in the SEC filings, but no one betting on this crazy stuff reads SEC filings.

[...] For speculators that were able to get into and out of these scams in time, it worked. A 1,000% gain obtained in a few days by hook or crook is nothing to sneeze at. But it's ending in tears for those who got into these scams too late and whose despised fiat currency just ended up providing the exit grease for early speculators. And short sellers, the lucky ones that got the timing right, are laughing all the way to the hated legacy banks.

But not all will get the timing right. Short sellers, when they want to take profits, have to buy their shares back in order to cover their short position, and many of the stocks are thinly traded, and covering a big short position can cause shares to bounce violently. So there will be some serious snap-backs, which might take the fun out of shorting these stocks.


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  • (Score: 1) by anubi on Tuesday January 30 2018, @04:17AM

    by anubi (2828) on Tuesday January 30 2018, @04:17AM (#630181) Journal

    I thought the risk was in keeping my resources denominated in something that could be printed in infinite quantity.

    Or in putting my resources into anything that had no intrinsic worth.

    I would rather own rhenium than gold, because rhenium is also in short supply, and is required for exotic defense systems.

    Somehow, I can't get on board with the idea that gold has much value other than what other people think its worth, because in and of itself, it has few uses other than anticorrosive plating. And we already have in vaults orders of magnitude more of the stuff than we need.

    I could live the rest of my life without ever seeing gold again... however I would notice a day without oil within minutes. If anything that van has taught me, its how much energy is in a gallon of fuel. I can't even push that thing with my own means.

    --
    "Prove all things; hold fast that which is good." [KJV: I Thessalonians 5:21]