Quote from Swan Noir:
First and foremost you pick a stock with a tight float -- relatively few shares in public hands/weak hands. Pros refer to those shares as what's "against them". Many years ago -- pre-Nasdaq -- my partner and I owned the control block of a tiny public oil and gas company. We owned nine million shares which I had in my desk drawer. Those shares represented the entire float except for 9,853 shares which were in the hands of the public. The stock was quoted in the "pink sheets" at 3.50 x 4.00 "valuing" the entire public float at under $40,000.
Granted it was a different regulatory environment at the time ... in fact it was a different world. Yet the concept remains the same. If you are going to "peg" a bid it is important to know how much stock will hit that bid and important to know that you can afford to buy what hits you and then move the bid up while absorbing affordable quantities on the way up.
Once the "easy' stock finds its way into your hands the PR begins -- WILL THIS GOLD FIND KICK OFF THE MADDEST RUSH SINCE CALIFORNIA IN 1849!!! -- and you are off to the races.
If you can find a long out of print copy of THE MIDAS TOUCH you will have not only have the course Stock Promotion 101 you will have it through the post doctoral level. At the time most of the great small company stock promoters were Canadian and amazingly many of them came from a few block area in Montreal.
A well capitalized promoter without much stock against him and a feel for strong PR appeals can take a stock through the roof on increasing volume and liquidate an astonishing large position as he turns from being the bid to hitting the bid. And, as Livermore points out, he sells most of it on the way down.
Hey ... the public loves a bargain!
