Turn $10,000 into a Quarter Million in Two Days.

Mike K

TCG Elite Member
Apr 11, 2008
13,214
2,586
So those following my stock trading saga might be familiar with the fact that for awhile I was playing around with some penny stocks. One of those penny stocks was the ticker DRYS: a shipping company in Greece.

This company has fallen on hard times, as have most dry good shipping companies, and saw their stock price fall 98% in the last year. The problem with this is that the major exchanges generally have requirements for remaining listed. So if a company experiences a drastic enough drop in their stock price they might be threatened with having their company delisted. That's not good.

So what companies do is they reverse split so that their share price stays above the minimum requirements for the exchange. So if my company has 100 shares worth $3.00 each and the requirement for my exchange is $5.00 per share, I'll do a 5:1 split which will make the value of each share $15 but reduce my outstanding shares from 100 to 20. This company's stock price fell so much this year that they did 6 reverse splits, going from 270,000 million outstanding shares to just a million.

So they effectively became a low float stock, which penny stock traders love because low float stocks are volatile and easy to pump. And pump it they did. If you had invested $10,000 in this company at a price of $5.00/ share on Friday, your investment would be worth $222,000 today. Two days of trading and $10,000 - $222,000. There are people on the boards showing their accounts and they made a quarter million dollars in 48 hours.

But it's not all fun and games

What happens here is basically a game of hot potato. People buy because others are buying and buying pushes the price up. Each person hopes there's more suckers behind them and largely the price inflates as matter of self fulfilling prophecy until it doesn't. Eventually people realize it's up on nothing and they're no longer willing to take the risk. And so the stock goes crashing back to it's original price.

This one is a little worse, at least for now. 43 minutes before the market opened this morning the NASDAQ exchange halted trading of this stock ticker pending a request of information from the company. It's important to note that the company is teetering on the verge of bankruptcy. Nobody knows what will happen now. The company could be un-halted tomorrow at which point all the amateur investors looking to get rich quick will immediately dump and cause the price to go tumbling, or worse, there might be fraud involved at which point everyone with money in the stock is effectively locked into it until it's unsalted and if it's determined that there is fraud it's much more likely to be un-halted closer to it's original $5 price. At worse, people that bought into the peak at $115 a share would lose everything. At best, those people have their money tied up indefinitely until the stock is un-halted.
 

sickmint79

I Drink Your Milkshake
Mar 2, 2008
26,884
16,592
grayslake
So those following my stock trading saga might be familiar with the fact that for awhile I was playing around with some penny stocks. One of those penny stocks was the ticker DRYS: a shipping company in Greece.

This company has fallen on hard times, as have most dry good shipping companies, and saw their stock price fall 98% in the last year. The problem with this is that the major exchanges generally have requirements for remaining listed. So if a company experiences a drastic enough drop in their stock price they might be threatened with having their company delisted. That's not good.

So what companies do is they reverse split so that their share price stays above the minimum requirements for the exchange. So if my company has 100 shares worth $3.00 each and the requirement for my exchange is $5.00 per share, I'll do a 5:1 split which will make the value of each share $15 but reduce my outstanding shares from 100 to 20. This company's stock price fell so much this year that they did 6 reverse splits, going from 270,000 million outstanding shares to just a million.

So they effectively became a low float stock, which penny stock traders love because low float stocks are volatile and easy to pump. And pump it they did. If you had invested $10,000 in this company at a price of $5.00/ share on Friday, your investment would be worth $222,000 today. Two days of trading and $10,000 - $222,000. There are people on the boards showing their accounts and they made a quarter million dollars in 48 hours.

But it's not all fun and games

What happens here is basically a game of hot potato. People buy because others are buying and buying pushes the price up. Each person hopes there's more suckers behind them and largely the price inflates as matter of self fulfilling prophecy until it doesn't. Eventually people realize it's up on nothing and they're no longer willing to take the risk. And so the stock goes crashing back to it's original price.

This one is a little worse, at least for now. 43 minutes before the market opened this morning the NASDAQ exchange halted trading of this stock ticker pending a request of information from the company. It's important to note that the company is teetering on the verge of bankruptcy. Nobody knows what will happen now. The company could be un-halted tomorrow at which point all the amateur investors looking to get rich quick will immediately dump and cause the price to go tumbling, or worse, there might be fraud involved at which point everyone with money in the stock is effectively locked into it until it's unsalted and if it's determined that there is fraud it's much more likely to be un-halted closer to it's original $5 price. At worse, people that bought into the peak at $115 a share would lose everything. At best, those people have their money tied up indefinitely until the stock is un-halted.

i don't understand who is buying in at $75 and is thinking they are not the sucker. although hey, luck and it worked out if they sold to the greater sucker at $100.
 

1quick

TCG Elite Member
TCG Premium
Jan 29, 2008
26,554
24,013
coal city
could you point me in the direction of a forum or a good place to learn more about day trading, I have plenty of extra time on my hands to learn but aside from long term investments I really haven't done much trading, I've told myself I would learn more but don't really know where to start
 

sickmint79

I Drink Your Milkshake
Mar 2, 2008
26,884
16,592
grayslake
could you point me in the direction of a forum or a good place to learn more about day trading, I have plenty of extra time on my hands to learn but aside from long term investments I really haven't done much trading, I've told myself I would Lear more but don't really know where to start

look up technical analysis, tim sykes has stuff, mike k can probably recommend stuff he likes and learned from too. there's a lot of luck and self fulfilling prophecies with it too imho. don't ignore the other side of this equation either - it's also a way to turn 250k into 10k.
 

1quick

TCG Elite Member
TCG Premium
Jan 29, 2008
26,554
24,013
coal city
look up technical analysis, tim sykes has stuff, mike k can probably recommend stuff he likes and learned from too. there's a lot of luck and self fulfilling prophecies with it too imho. don't ignore the other side of this equation either - it's also a way to turn 250k into 10k.

Yeah I'm looking to start smaller scale than 10k lol
 

Rent Free

TCG Elite Member
Jan 26, 2015
24,407
20,261
Nowheresville North Dakota
must be nice i read about this last wed after the election.

Icahn Left Trump Victory Party to Bet $1 Billion on Stocks - Bloomberg

so please try say the market wasnt a roller coaster. it was well known that the time was perfect to go ride the stock market wave......

carl icahn left trump party to go throw a billion dollars around and see what happened after the dust settled.
 

Bob Kazamakis

I’m the f-ing lizard king
TCG Premium
Oct 24, 2007
85,189
44,807
Denver
Real Name
JK
But that literally has nothing to do with this thread. The OP clearly describes what happened to cause the scheme. Stop bringing politics into threads where it doesn't belong. It's ruining this site.
Exactly. Mike clearly described this reverse split tactic in the first post. I don't think a failing company that's just trying to stay in the game a bit longer is really effected by anything but themselves and the people scheming to making money off suckers.


Also thank you for pointing that out. This place has very much become the Chicago lets bitch about politics, or TCLBAP for short.
 

Rent Free

TCG Elite Member
Jan 26, 2015
24,407
20,261
Nowheresville North Dakota
you seriously dont think the market roller coaster wasnt due to the election? for christ sakes put 2 and 2 together.........

clearly the roller coaster is indeed what caused what happened to the stock the OP is talking about.

god forbid i mention a factor that caused what the OP is talking about.

buncha hurt feels bitching [MENTION=2449]ilikemtb999[/MENTION] and [MENTION=682]Sprayin[/MENTION]

nope not related to the election timing it was poof merely a concidence :rofl:

wasnt hostile in here at all nor was my comment until some fuckface decided to take it out of context.
 

Bob Kazamakis

I’m the f-ing lizard king
TCG Premium
Oct 24, 2007
85,189
44,807
Denver
Real Name
JK
you seriously dont think the market roller coaster wasnt due to the election? for christ sakes put 2 and 2 together.........

clearly the roller coaster is indeed what caused what happened to the stock the OP is talking about.

god forbid i mention a factor that caused what the OP is talking about.

buncha hurt feels bitching [MENTION=2449]ilikemtb999[/MENTION] and [MENTION=682]Sprayin[/MENTION]

nope not related to the election timing it was poof merely a concidence :rofl:

wasnt hostile in here at all nor was my comment until some fuckface decided to take it out of context.

You keep referring to the entire stock market, that's not what this thread is about. It's about a failing shipping company in another country attempting to stay afloat by the technique the OP described in the first post. Maybe reread the first post and google a few things if you're having trouble?
 

Rent Free

TCG Elite Member
Jan 26, 2015
24,407
20,261
Nowheresville North Dakota
You keep referring to the entire stock market, that's not what this thread is about. It's about a failing shipping company in another country attempting to stay afloat by the technique the OP described in the first post. Maybe reread the first post and google a few things if you're having trouble?

:rofl: yes i understand what happened with the company and the timing and sequence of events was no concidence......

as for the entire stock market yes i keep refering to it because it is a relevant factor people were dumping money into the market looking to make quick money on the roller coaster which compounded the drastic ballon on that stock during the time span.
 

bmoore04

TCG Elite Member
Jul 30, 2010
3,878
707
Winfield IL
:rofl: yes i understand what happened with the company and the timing and sequence of events was no concidence......

as for the entire stock market yes i keep refering to it because it is a relevant factor people were dumping money into the market looking to make quick money on the roller coaster which compounded the drastic ballon on that stock during the time span.

You realize people have been pulling money from the same market with fear to the election right?
 

Mike K

TCG Elite Member
Apr 11, 2008
13,214
2,586
So basically you have to rely on suckers to actually make money though? Because you'd have to be able to sell to some idiot at a profit and whomever is left standing at the end is the guy getting shafted.

Yes, exactly. Those that buy in at the highest are left holding the bag. And since most of them are newbs they'll sit there and watch the stock price fall, hoping it rebounds so they can break even, rather than cut their losses and live to trade another day.

i don't understand who is buying in at $75 and is thinking they are not the sucker. although hey, luck and it worked out if they sold to the greater sucker at $100.

There's a lot of amateurs getting into the penny stock stuff now and it's dog eat dog. They drag these guys in with hopes of getting rich, bleed them dry and then use their own success in bleeding the newbs dry to then entice more amateurs to come in.

You don't realize how clueless most of these people are until the stock gets halted and you see people that blindly sunk 10 - 20k into it then start asking others on Stocktwits what a halt is, when they'll be able to get their money back, if they'll be able to get their money back, etc.

And often times you can say that rallies like these are a short squeeze but the company had (going off memory here) 100,000 shorted shares on a 1 million share float, trading on a volume of 10,000,000 shares yesterday. That means the entire float changed hands 10 times in one day. That's not a short squeeze. It's bull vs bull. All this for a company that generally only sees 20 - 40k shares traded a day.

the whole market was a roller coaster and was temporarily halted too iirc.

how would it not have been a factor.

drys is traded on nasdaq.

Market futures were halted and basically recovered before the market was open. Futures are a predictor of what people think the market will do, not what it's actually doing. Completely different animal.

could you point me in the direction of a forum or a good place to learn more about day trading, I have plenty of extra time on my hands to learn but aside from long term investments I really haven't done much trading, I've told myself I would learn more but don't really know where to start

Investopedia is priceless. I reference it all the time, often just to better understand even basic principles. The only advice I could offer otherwise is not to listen to any gurus. There's so much BS out there. Take $500, prepare to lose it and start trading. The best way to learn is to play with real money.

Investing 101: Introduction | Investopedia

Yeah I'm looking to start smaller scale than 10k lol

Penny stocks are good then. You can start with a few hundred and make decent gains. Personally I prefer finding stocks that trade in patterns that are at the low end of that pattern. As of late, Solar City has been trading generally between low $19.00's and low $20.00's. So I just wait until it's somewhere like $19.25, load up and then dump at $20.00. It's easy to cut your loses with these stocks too because if they break out of that trading pattern they will break hard, so you know to cut and run quick.

you seriously dont think the market roller coaster wasnt due to the election? for christ sakes put 2 and 2 together.........

clearly the roller coaster is indeed what caused what happened to the stock the OP is talking about.

Market volatility from the election likely had almost nothing to do with this. Low float stocks with decent short interest are generally set to pop on any news. This stock is also on the watch lists of a lot of penny guys as being a previous spiker. So that puts in in a good position to start with. On top of that the Baltic Dry Index has been rising. This is an index that measures the cost to transport dry goods by sea. But the real catalyst for this was their earnings report on the 9th. That is what started the snowball rolling.
 
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