You know pot must be legal these days.
How else do you explain these non-stop, non-pause moves up in the market on no particular volume? Can everything really be that awesome and what, exactly is it that is awesome in the first place?
Yesterday we saw Avon (AVP) jump 20% after a FAKE takeover rumor on an SEC-maintained web site from a FAKE company calling itself PTG Capital Partners who filed a document stating they would pay $8Bn for AVP, which has generally been in free-fall for two years as their business model collapses.
Despite the TERRIBLE fundamentals of this company, within two minutes of this fake filing being posted by a fake company (11:34), the stock began climbing from $6.50, all the way up to $8 by 11:45 before the 23% gain triggered a halt in the system.
That 7-minute break gave AVP time to deny that they had received an offer and the stock re-opened at 11:52 and dropped 10% that same minute, triggering another halt. Another 7-minute break and another 7-minute break and another drop of just under 10% let the stock sell off for the rest of the day. All in all it was total idiocy, but idiocy with a $3Bn company on a major exchange - not a penny stock!
"The SEC has so many forms being filed, I don't think it can check every one," former SEC lawyer, Robert Heim said. "But I think they could do a better job acting as a gatekeeper."
The filing contained many red flags raising questions about its authenticity, including numerous typographical errors and two different spellings of the company's own name. That would be highly unusual in an authentic regulatory filing, which would receive close scrutiny from companies before being posted. But robot traders and the sheeple that follow them don't read the reports, they just look for the keyword "buyout" and the frenzy begins!
