New Trade

[FinDoc]

I bought July call options on YRC Worldwide (YRCW) at strike $1.  They are a trucking company.  This is a speculative bottom-feeding play.  They were facing bankruptcy and went through a debt-for-equity swap on Dec. 31.  They now have until April before they have another debt payment due.  I figure by July they will either not exist or be trading at 2-3 bucks a share.   

Roller coaster ride for CMFO - jumped about ten percent, then dropped 20 and now back a little.  I still like it.  Looks a little like what happened with Ambassador's Group.  And Northeast Utilities.  And Mentor Graphics.  And CIT preferred.  And BofA preferred. And AVF.  Anybody noticing a pattern here?

[BAEVentures]

The jumps have all been on high volume which typically indicates institutional buying although we will be unable to confirm until the following quarter. Typically this type of price and volume movement in my experience is directly related to an institution or two buying for 1-3 days, letting the action settle and price drop back down a little by profit takers, and then resuming their buying, which will cause nice price movement. Due to the small cap nature of CMFO, institutional buying on any decently large scale will cause the price to move at a higher percentage rate.

You will notice a similar pattern on GFRE (after their 4 : 1 reverse split (move from ~9.00 to 14.00 in the last 3 months). Similar action can also be found on HGSI after their initial jump in price up to the mid teens (from $18.00 to $32.00). I don't mind seeing a bit of downward price movement after a good move up on a micro cap at all. Typically signals a chance for some consolidation and institutions to be looking to add more at a better price point.

Just my 2 cents...

BAEVentures

[FinDoc]

I agree.  You can see they were block trades, which can cause large jumps for a small stock.  That's why I always say never buy anything that you aren't ready to hold long-term.

They just announced they are selling additional stock under a shelf registration at $6.50 a share.  That doesn't make much sense to me - price is way below market price and the company is cash rich.  Why on Earth would they issue at that price?  They have the ability to go through another offering if they want to sell additional shares, they don't need the shelf sale.  There may be some backlash among existing shareholders about this move.

This might get as interesting as CIT and BOA!

[go4reward]

I sold all my CMFO shares before today's news at a lost. I don't like the big drops for the past few days. CIT is too risky. BOA is decent.

[FinDoc]

I sold all my CMFO shares before today's news at a lost. I don't like the big drops for the past few days. CIT is too risky. BOA is decent.

oh no, i meant as BOA and CIT were, not presently - BOA back in Jan-Feb and CIT in June-July, last year.  They aren't interesting anymore.

Maybe CMFO got spooked by the news of the Chinese "crackdown" on lending, thinking they wouldn't be able to raise funds in the future, so decided to jump now and hoard.  Regardless, they have a pile of cash, we'll see what they do.  If they can keep generating 25% on it, they should be ok.

[go4reward]

I sold all my CMFO shares before today's news at a lost. I don't like the big drops for the past few days. CIT is too risky. BOA is decent.

oh no, i meant as BOA and CIT were, not presently - BOA back in Jan-Feb and CIT in June-July, last year.  They aren't interesting anymore.

Maybe CMFO got spooked by the news of the Chinese "crackdown" on lending, thinking they wouldn't be able to raise funds in the future, so decided to jump now and hoard.  Regardless, they have a pile of cash, we'll see what they do.  If they can keep generating 25% on it, they should be ok.

Short term for CMFO does not look good, but long term maybe fine.