Smells even funnier

by Volker Weber

It's hard to sell with low volumes

Ask $6, bid $2.75, for 500. That is quite a spread. Very hard to turn stock into money. Why would you sell stock that has a target of $9? Simple. You rather want money now.

For the sake of argument, let's assume you would like to sell your privately held company and cannot find anybody who wants to pay cash. Then you might be tempted to sell for stock in a publicly traded entity. Once you start selling those shares you may find out that they are less valued than you thought. Hence the spread. And the stock goes from $4.25 close to $4 open via $3.8 for the first trade to $3.5 for the second. Who wants to go short?

Watch this space.


What is a 'Target' for a stock? Nothing but a figure some crackhead called Mr. M.T. Suit came up with after scratching his scrotum. The price is right when buyer meets seller. End of story.

Thomas Vogler, 2011-06-18

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I explain difficult concepts in simple ways. For free, and for money. Clue procurement and bullshit detection.


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