BRN Discussion Ongoing

[Fact Finder]

Ok, probably a silly question but let me get something straight as I just don’t understand all this sort of stuff that well. If an institution, say a super fund or investment fund etc, buys 1 million shares at $1 each for $1M for argument’s sake and then loans them to a shorter who through manipulation forces the price down to say 50c , who then buys them back to give back to the institution. The institution’s fund is now worth half what it was. How is this good for the institution?

Shorting in simple terms works this way:

1. You need a shareholder who believes the company is a great long term secure investment.

2. You need a shorter who thinks that in the short term the price of the share held by 1. above will drop.

3. The shorter goes to the shareholder and says will you lend me your shares?

4. The shareholder says yes and requests the following:

a) Security for the value of the lent shares likely a bank guarantee backed by a mortgage;
b) A fee based on the agreed length of the loan and that fee is paid at the time of lending the shares;
c) An agreement that at the end of the agreed term a further fee will be payable calculated on a daily basis until the lent shares are returned;
d) The shareholder lends the shares and immediately the shorter sells the shares on market locking in the value of the lent shares. The shorter keeps the money from the sale of the shares.
e) The shorter then waits for the shares to drop in price to the point where he can buy back the number of lent shares and pocket the difference between what he sold the shares for and what he bought them back for and hopes that after deducting all the fees and brokerage he is left with a profit.

Now this all seems reasonable if everyone plays by the rules but obviously the bigger the fall in the share price after entering the agreement and selling the shares the better so enter the illegal manipulators to help the short manipulate the market and panic retail into selling so they cause the share price to drop further than it would have but for the manipulation.

Then consider this issue.

I have said moving up the ASX just brings bigger and more professional shorting.

We hear all the time the statement “look institutions have been buying they now have more shares but why hasn’t the price gone up?”

Simple a wealthy institutional shorter goes to an institution A. that holds shares in a target company in which they are interested.

They at the same time go to Institution B. who they know is interested in building a position in their target company. They say to this company would you like to take ‘x’ number of shares in this company off my hands at the current market price.

This company says yes because they know if they buy on market they will put upward pressure on the price.

So they agree to pay the Institutional short a commission and Institution A. the Institutional short and Institution B. play
off-market pass the parcel and everybody wins. No increased market pressure pushing up the price.

The share price falls with a little help and the short institution buys back the shares and returns them to institution A.

Institutional ownership in the target company has doubled.

The short institution has a nice profit.

Retail sit scratching their heads as to why all this institutional buying has not pushed up the price instead the price has fallen.

Sorry everybody but poor old retail who get panicked and sell at a loss wins.

But who cares about retail as long as the big boys are happy. Hey what pass me the Financial Times Chauncey. There’s a good fellow.

My opinion only DYOR
FF

AKIDA BALLISTA

 

[Diogenese]

Charts unfortunately don’t help with this, BRN has been going off the general market down trend and up trends and after this news it went down. Many people lost confidence and sold out. My opinion only, dyor. I guess we can hopefully see something during this quater based on what the ceo said in 4c. However, that will only show on the next 4c unless there are updates in between from the company. Nothing has changed in the company to be honest people just got tired off holding. New technology never seen in the world before trying to commercialise is not easy, sometimes the world is not ready for it, however, I believe with the use cases presented by the the company it is a good time. Talking to clients and educating them takes times. People don’t like change.

I actually want to buy a house next 6 months so I’m thinking of selling all my shares in everything. I just wanted to get people’s opinion on this as I feel like it will be a big mistake LMAO

My crystal ball does not extend out to 6 months, but ... if you've saved a deposit, how much interest is it earning?

 

[Izzzzzzzzzzy]

My crystal ball does not extend out to 6 months, but ... if you've saved a deposit, how much interest is it earning?

I transferred over to ING so 4.05%

 

[Diogenese]

Shorting in simple terms works this way:

1. You need a shareholder who believes the company is a great long term secure investment.

2. You need a shorter who thinks that in the short term the price of the share held by 1. above will drop.

3. The shorter goes to the shareholder and says will you lend me your shares?

4. The shareholder says yes and requests the following:

a) Security for the value of the lent shares likely a bank guarantee backed by a mortgage;
b) A fee based on the agreed length of the loan and that fee is paid at the time of lending the shares;
c) An agreement that at the end of the agreed term a further fee will be payable calculated on a daily basis until the lent shares are returned;
d) The shareholder lends the shares and immediately the shorter sells the shares on market locking in the value of the lent shares. The shorter keeps the money from the sale of the shares.
e) The shorter then waits for the shares to drop in price to the point where he can buy back the number of lent shares and pocket the difference between what he sold the shares for and what he bought them back for and hopes that after deducting all the fees and brokerage he is left with a profit.

Now this all seems reasonable if everyone plays by the rules but obviously the bigger the fall in the share price after entering the agreement and selling the shares the better so enter the illegal manipulators to help the short manipulate the market and panic retail into selling so they cause the share price to drop further than it would have but for the manipulation.

Then consider this issue.

I have said moving up the ASX just brings bigger and more professional shorting.

We hear all the time the statement “look institutions have been buying they now have more shares but why hasn’t the price gone up?”

Simple a wealthy institutional shorter goes to an institution A. that holds shares in a target company in which they are interested.

They at the same time go to Institution B. who they know is interested in building a position in their target company. They say to this company would you like to take ‘x’ number of shares in this company off my hands at the current market price.

This company says yes because they know if they buy on market they will put upward pressure on the price.

So they agree to pay the Institutional short a commission and Institution A. the Institutional short and Institution B. play
off-market pass the parcel and everybody wins. No increased market pressure pushing up the price.

The share price falls with a little help and the short institution buys back the shares and returns them to institution A.

Institutional ownership in the target company has doubled.

The short institution has a nice profit.

Retail sit scratching their heads as to why all this institutional buying has not pushed up the price instead the price has fallen.

Sorry everybody but poor old retail who get panicked and sell at a loss wins.

But who cares about retail as long as the big boys are happy. Hey what pass me the Financial Times Chauncey. There’s a good fellow.

My opinion only DYOR
FF

AKIDA BALLISTA

But surely the sophisticated tools in ASIC's hands would detect such egregious and, dare I say, repetitive manipulation?

 

[Diogenese]

I transferred over to ING so 4.05%

... and not a farthing more?

 

[Diogenese]

Ok, probably a silly question but let me get something straight as I just don’t understand all this sort of stuff that well. If an institution, say a super fund or investment fund etc, buys 1 million shares at $1 each for $1M for argument’s sake and then loans them to a shorter who through manipulation forces the price down to say 50c , who then buys them back to give back to the institution. The institution’s fund is now worth half what it was. How is this good for the institution?

You refer to the shorter manipulating the SP. That would be illegal.

 

[Fact Finder]

Charts unfortunately don’t help with this, BRN has been going off the general market down trend and up trends and after this news it went down. Many people lost confidence and sold out. My opinion only, dyor. I guess we can hopefully see something during this quater based on what the ceo said in 4c. However, that will only show on the next 4c unless there are updates in between from the company. Nothing has changed in the company to be honest people just got tired off holding. New technology never seen in the world before trying to commercialise is not easy, sometimes the world is not ready for it, however, I believe with the use cases presented by the the company it is a good time. Talking to clients and educating them takes times. People don’t like change.

I actually want to buy a house next 6 months so I’m thinking of selling all my shares in everything. I just wanted to get people’s opinion on this as I feel like it will be a big mistake LMAO

Hi @Izzzzzzzzzzy

As @Diogenese said none of us have a crystal ball.

We personally love real estate as an investment and some advisors might say and have that we are over weight in real estate but advisors don’t know what we know which is what we are comfortable with so my advice to you is simply that do what you are comfortable with doing.

A very good friend who was originally from Hong Kong having escaped from China and migrated to Sydney where he had become very successful in import export would counsel us about what a poor decision we had made buying our family home.

It was his view that as a family home makes no money we should invest in and grow our business.

As he grew his businesses he for many years slept/lived in his warehouse office.

He was successful but importantly he was personally comfortable with his decision so he never looked back with regrets.

The one rule applies whether it’s real estate or shares or any other investment rewards are maximised by time in the market.

My opinion only DYOR
FF

AKIDA BALLISTA

 

[Fact Finder]

But surely the sophisticated tools in ASIC's hands would detect such egregious and, dare I say, repetitive manipulation?

Detecting and doing something are two different things.

Regulators in the financial sector prefer the silk glove of education and changing cultures to bring about sustainable long term reform of systems which once reformed can become self regulatory.

So much more efficient than the iron fist ruling by fear continuously funded from the public purse.

This is the 21st century not the dark ages.

Not my opinion so DYOR
FF

AKIDA BALLISTA

 

[Martin00]

This is from 'Share in Value' sent out last night.
https://nvlu-zc1.campaign-view.com....fbc94&n=11699e4c35bf411&mrd=18cf8c06fbc82&m=1

 

[Xray1]

You refer to the shorter manipulating the SP. That would be illegal.

IMO ... there was no manipulation involved this time round ....... It was purely the result of a poor revenue 4C with short term investors being burn't and mitigating their losses ..... whilst in turn, I think that many LTH's took the opportunity / advantage to top up their holdings ...just like I did !!!

 

[jla]

This is from 'Share in Value' sent out last night.
https://nvlu-zc1.campaign-view.com....fbc94&n=11699e4c35bf411&mrd=18cf8c06fbc82&m=1

Thanks sharing.

 

[Diogenese]

Detecting and doing something are two different things.

Regulators in the financial sector prefer the silk glove of education and changing cultures to bring about sustainable long term reform of systems which once reformed can become self regulatory.

So much more efficient than the iron fist ruling by fear continuously funded from the public purse.

This is the 21st century not the dark ages.

Not my opinion so DYOR
FF

AKIDA BALLISTA

Give me the silk glove every time.

 

[Fact Finder]

This is from 'Share in Value' sent out last night.
https://nvlu-zc1.campaign-view.com....fbc94&n=11699e4c35bf411&mrd=18cf8c06fbc82&m=1

Hi Martin
Now this is a way to emerge I have taken the liberty of copying this article as many will not open links but I am a past Optus customer so what’s the point of protecting my details I will open anything. Just kidding but everyone this is a must read:

BrainChip (ASX: BRN)

BrainChip (ASX: BRN) shares are down ~20% (at the time of writing) today on the back of reporting routine quarterly activities for 1Q23. While no bad news is being reported, BRN shares have been under pressure as traders are booking profits, as there is no good news on the commercialisation front yet!

​

Today’s decline was mainly due to two factors: 1. BrainChip reported $118,000 in revenue from customers in the quarter, and traders have been expecting more considering that BRN has a $1.5 billion market capitalisation. With only $118,000 coming in, BrainChip reported a cash burn of $3.8 million. The company has $24.6 million in cash on its balance sheet. This is enough funding for 6 quarters – meaning that BRN would not have to perform a capital raise for over a year. 2. A lack of news flow and commentary by the CEO. We know that BrainChip has shipped Akida development kits to partners, large enterprises in strategic end markets, and Original Equipment Manufacturers (“OEMs”) to perform their own internal testing, validation, and product development. BrainChip said they see the greatest amount of sales activity and engagement in the company’s history. However, no new deals have been announced yet. Today’s decline is a case of traders and investors being eager to hear more news from the CEO about their commercialisation timeline. The Verdict BrainChip said it will focus on key sales targets and converting technical evaluations into paid licenses in the coming quarter. In addition, BRN is accelerating the development of its next-generation Akida IP and products to extend its technological lead and market opportunity. There was no bad news today, but there is no good news either. The decline can therefore be attributed to heightened speculation in the market. The company remains well-funded, and we have placed BrainChip under review as we perform a comprehensive analysis and share an update in the coming days

 

[equanimous]

IMO ... there was no manipulation involved this time round ....... It was purely the result of a poor revenue 4C with short term investors being burn't and mitigating their losses ..... whilst in turn, I think that many LTH's took the opportunity / advantage to top up their holdings ...just like I did !!!

EVERYTHING in the financial market is manipulated. There is no exception

 

[HopalongPetrovski]

Ok, probably a silly question but let me get something straight as I just don’t understand all this sort of stuff that well. If an institution, say a super fund or investment fund etc, buys 1 million shares at $1 each for $1M for argument’s sake and then loans them to a shorter who through manipulation forces the price down to say 50c , who then buys them back to give back to the institution. The institution’s fund is now worth half what it was. How is this good for the institution?

It's just a part of the mix.
Your hypothetical fund who "loans out" for a hefty fee the 1million shares will have billions under management spread over a diverse range of the market and can call in those 1 million at any time irregardless of the current share price whether it be 50 cents or $1.50.
The fund will also have that $ million's value covered by variations of insurance, or by farming part of it out to other speculators or have a lien over other collateral owned by the shorter.
Most of the stocks the funds own, they are long on, but they can effectively "rent out" a proportion of a percentage at any given time basically risk free so that they have an income stream whether the market is going up or down.
Soph's play these games and occasionally get burnt in which case they'll probably be offered a piece of a capital raise at favourable terms providing them a stag profit which they can sell into.
Of course, you must've gone to the right school darlink.

 

[Martin00]

Thanks sharing.

Just to provide some background regarding this 'Shares in Value' article, they had a recommendation for BRN at 92c on the 27/06/22.

Previously they had a buy at 0.49c on 01/09/22 followed by a sell recommendation of $1.40 on the 14/01/22.

I am not promoting them, as they get some recommendations wrong and right, but just giving holders a balanced perspective compared to 'Motley Fools' mob.

 

[Esq.111]

Give me the silk glove every time.

Afternoon Diogenese,

Stop it , A .... a, Great sense of humour .

Thankyou for your expertise breaking down all of the technical articles & questions of late for all mere mortles of late.

Extremely greatful.

Roughly two days ago , Anistasi In tech, did a short vidio on IBM'S new chip . I briefly watched her video and a few things rang a bell, in the technical jargon side of things.

Only if you are board, and I'm shaw you are not , Might be worth having a look at.
Anistaci's post / video popped up in my mail box two days ago so I presume it is her latest release.

Regards,
Esq.

 

[Martin00]

Hi Martin
Now this is a way to emerge I have taken the liberty of copying this article as many will not open links but I am a past Optus customer so what’s the point of protecting my details I will open anything. Just kidding but everyone this is a must read:

BrainChip (ASX: BRN)

BrainChip (ASX: BRN) shares are down ~20% (at the time of writing) today on the back of reporting routine quarterly activities for 1Q23. While no bad news is being reported, BRN shares have been under pressure as traders are booking profits, as there is no good news on the commercialisation front yet!

​

Today’s decline was mainly due to two factors: 1. BrainChip reported $118,000 in revenue from customers in the quarter, and traders have been expecting more considering that BRN has a $1.5 billion market capitalisation. With only $118,000 coming in, BrainChip reported a cash burn of $3.8 million. The company has $24.6 million in cash on its balance sheet. This is enough funding for 6 quarters – meaning that BRN would not have to perform a capital raise for over a year. 2. A lack of news flow and commentary by the CEO. We know that BrainChip has shipped Akida development kits to partners, large enterprises in strategic end markets, and Original Equipment Manufacturers (“OEMs”) to perform their own internal testing, validation, and product development. BrainChip said they see the greatest amount of sales activity and engagement in the company’s history. However, no new deals have been announced yet. Today’s decline is a case of traders and investors being eager to hear more news from the CEO about their commercialisation timeline. The Verdict BrainChip said it will focus on key sales targets and converting technical evaluations into paid licenses in the coming quarter. In addition, BRN is accelerating the development of its next-generation Akida IP and products to extend its technological lead and market opportunity. There was no bad news today, but there is no good news either. The decline can therefore be attributed to heightened speculation in the market. The company remains well-funded, and we have placed BrainChip under review as we perform a comprehensive analysis and share an update in the coming days

Thanks FF , wasn't sure if I should copy and paste or provide a link.

 

[Fact Finder]

Hi Martin
Now this is a way to emerge I have taken the liberty of copying this article as many will not open links but I am a past Optus customer so what’s the point of protecting my details I will open anything. Just kidding but everyone this is a must read:

BrainChip (ASX: BRN)

BrainChip (ASX: BRN) shares are down ~20% (at the time of writing) today on the back of reporting routine quarterly activities for 1Q23. While no bad news is being reported, BRN shares have been under pressure as traders are booking profits, as there is no good news on the commercialisation front yet!

​

Today’s decline was mainly due to two factors: 1. BrainChip reported $118,000 in revenue from customers in the quarter, and traders have been expecting more considering that BRN has a $1.5 billion market capitalisation. With only $118,000 coming in, BrainChip reported a cash burn of $3.8 million. The company has $24.6 million in cash on its balance sheet. This is enough funding for 6 quarters – meaning that BRN would not have to perform a capital raise for over a year. 2. A lack of news flow and commentary by the CEO. We know that BrainChip has shipped Akida development kits to partners, large enterprises in strategic end markets, and Original Equipment Manufacturers (“OEMs”) to perform their own internal testing, validation, and product development. BrainChip said they see the greatest amount of sales activity and engagement in the company’s history. However, no new deals have been announced yet. Today’s decline is a case of traders and investors being eager to hear more news from the CEO about their commercialisation timeline. The Verdict BrainChip said it will focus on key sales targets and converting technical evaluations into paid licenses in the coming quarter. In addition, BRN is accelerating the development of its next-generation Akida IP and products to extend its technological lead and market opportunity. There was no bad news today, but there is no good news either. The decline can therefore be attributed to heightened speculation in the market. The company remains well-funded, and we have placed BrainChip under review as we perform a comprehensive analysis and share an update in the coming days

Hey Blind Freddie these jokers recon Brainchips current cash of $24.6 million gives them 6 quarters of operating runway.

How many quarters are there in a year?

What’s that 4. So 4 into 6 goes how much?

A year and a half so if you double $24.6 million what’s that?

Really $49.2 million so that’s less than the $50 million you said they can get their hands on which would be three years and a bit left over.

Do you recon these jokers have got that right?

You do. 3 years plus I don’t believe it you sure your maths is right?

I mean if you are wrong about how many quarters are in a year.

I’m gunna Google it to be sure.

Hey Freddie your right. No doubt about you. Mum was right you certainly are the one with the brains.

Three years so that bloke saying the next 4C’s was make or break was talking through his hat. I’ll tell him he’s dreaming if I see him down the pub.

My opinion only and lots of plagiarism so DYOR & add ups.
FF

AKIDA BALLISTA

 

[Fact Finder]

Thanks FF , wasn't sure if I should copy and paste or provide a link.

I have found it is best to copy and past at least the relevant part relating to BRN or the point you want to make. Sometimes it will be too long as there is a character limit on individual posts.
Regards
FF

AKIDA BALLISTA