Selling a stock when you think you think it will fall to buy back later is very similar to shorting with the difference that you don't have to return the shares to anyone but yourself.
This is a trading tool I use daily, more so when my trade is in profit but I think there will be a temporary fall. I won't say the name but you could work it out from the prices I mention: I recently sold some shares at $3.40. I then bought same $ value back at $3.18 and $2.90. From a tax perspective, the trade is nulled as there was no $ difference but I ended up with more shares. This technique has permitted me to end up practically free holding that company (average buy price currenty 16c, current SP $2.99). Of course if I get it wrong, I have to buy back at a higher price but if I think it's going up then that's OK. So far it's working enough to benefit me.
Now plug the numbers a large institution or someone with access to many $ in and you end up with a considerable advantage. Similarly if a large holder floods the market with say 50% of the daily shares traded then it's likely the price will fall. They could buy back equivalent $ value that they sold (and have more shares) and/or have a tax loss to show against a gain elsewhere.
It's just juggling. But the aim is to increase your share count for less $ especially if you think the share will ultimately increase in value. If you thought it would fall, then you'd just sell and sit it out and hang on to the loss to offset some other gain which I'm told you can do indefinitely. It is a lot of effort and comes down to timing but can be worth it.
Hope this gives a perspective - maybe not everyone's. Also, I am not saying that is what is happening with RNU. I suspect that smart people are just reducing their losses to return when they think the environment is better.
Add to My Watchlist
What is My Watchlist?
