VIPM’s Strong Run 04 May 2007 Part 1 of 4 Parts
VIPM’s Strong Run 04 May 2007
Thursday 03 May, the day before VIPM’s strong run, someone mentioned VIPM in passing in one of the threads. I didn’t know a thing about the company or stock. I checked the latest price and saw it was .0001 and thought, “Well maybe it will show some activity”, so I stuck it on a watch list and forgot about it.
Then Friday morning a few minutes before the market opened, I saw where VIPM had a new PR.http://biz.yahoo.com/iw/070504/0248184.html
I read it and thought the PR was perhaps sufficient to make the stock move some, so I started watching it. I was looking to jump-in if it gave signs of moving, ride it up a little and jump off – a quick flip. However at the open bell it took off like a rocket and soared almost straight up. I wasn’t going to chase the stock*
so I sat back and watched. I wasn’t prepared for what I saw though.
The close the previous day, Thursday, 03 May 2007 was .0001. Friday morning the stock opened at .0030 and moved rapidly up from there. In less than nine minutes it had hit .0100 and in less than 11 minutes it hit .0150. Say what???? A 9900% gain in 9 minutes and a 14,900% gain in 11 minutes?
Of course, the chance I missed of getting rich off VIPM immediately popped into my head. “Oh, what’s wrong with me? Why didn’t I grab 9 million shares yesterday when it was still at .0001? Or even a measly 3 million shares? That would have cost me only $300. Let me see. 3 million shares at .0150 would have been a profit of $45,000 dollars!! 9 million shares at .0150 woulda been a profit of $135,000. A $135,000 profit in less than a day on a cost of $900! Oh heart, be still!!!!” $135K would have been a good start on the down payment on the 200-foot yacht I’ve been dreaming of for so long.
The stock bounced up and down between .0100 and .0150 until 9:50 AM and then fell for a few minutes when suddenly about 10:02 AM it jumped to .0150 again. It bounced up and down again for a while, hitting its HOD**
of .0150 for the final time. The stock declined the rest of the day closing at .0050, a gain of 4900%.
On the surface, it appears I missed a great chance to put some heavy bread in my pocket, doesn’t it? Ah, but only if it were that easy.
The clue that something’s amiss is the large percent gains, 9900% in 9 minutes, 14,900% in 11 minutes and a closing gain of 4900%. Whoever’s heard of a penny stock making those kinds of gains so quickly in one day? Has one ever gained 14,900% in a full day? Perhaps there are a few but I’ve never heard of them.
A penny stock running to a 14,900% gain and closing up 4900% for the day is rarer than a dodo bird, so first we’ll explain the reasons why the stock showed such phenomenal behavior. Afterwards we’ll look at the charts***
and draw some conclusions from VIPM’s run.
If you think about it, the gains shown by VIPM are simply stunning. In fact, they are misleading. Here’s why.
The percent gain is calculated by subtracting the closing price of the previous day (Y = previous day’s close) from the current price (T = current price or closing price for the current day). This sum is then divided by the closing price of the previous day (Y) and multiplied by 100.
%Gain = (T-Y)/Y * 100
VIPM closed at .0050 (T) last Friday. The previous close the day before was .0001 (Y),
So: %Gain For the Day (Friday, 04 May 2007) = (.0050-.0001)/.0001 * 100 = 4900.
Here’s the rub. The closing price last Thursday, the day before VIPM’s run, was .0001.
I took a look at the time and sales data****
for VIPM for the period of 30 April - 03 May. That’s Monday through Thursday, the four days before VIPM’s run. The data wasn't complete but the lowest price where shares were bought or sold was .0028. There were two or three trades at .0028. There were more trades at .0030 however.
Additionally some HSM~ers that have been following VIPM posted that the stock hasn’t been available at .0001 for months. The last trade last Thursday was a small block of 100 shares at .0001. As someone pointed out, this was probably MM~s moving shares around. Nevertheless, this .0001 figure is the closing price of the previous day and is what was used in everybody’s software calculating the percent gains for VIPM last Friday.
So it appears the cheapest anybody could have bought VIPM last week, and perhaps for months, was .0028 or .0030. So if you had spotted VIPM last Thursday and had decided to buy some shares, you would have probably paid .0028 or .0030 per share.
We’ll recalculate the percent gains with the more realistic number of .0030 as the closing price for last Thursday, the day before VIPM’s run.
HOD %Gain = (.0150 - .0030)/.0030 * 100
HOD %Gain = 400
%Gain For The Day = (.0050 - .0030)/.0030 *100
%Gain For The Day = 67
These figures are much more reasonable and in-line with what we expect penny stocks might do in strong runs.
Continued in Part 2