Now whereas I'm not trying to defend the managers in any way, there is a valid reason why we have no buyers.
They have simply run out of funds after buying up big during last Monday's fire sale!!!
Just prior to Deephaven's stock coming on the market, trading was holding above the dollar mark quite comfortably and I'm sure many who either wanted a position in UMC or holders who were wishing to top up were closely monitoring the sp for any weakness.
Bingo!!! Out of nowhere comes the Deutsche Bank with a 6.5m belly full of shares to offload in one day. Shaw's would have been one of very few who got wind of the fire sale and whilst they were soaking up most of the stock, it triggered off a feeding frenzy. Unfortunately the selling out numbered the buying, in which case the sp dropped significantly for the day and those who participated all left the scene with a tummy ache which has since developed into one big headache for all of us who hold.
But wait, it doesn't end there. Most who were trying to sell the stock last Monday week were bullied out of the way by the aggressive selling and their issue of trying to sell the stock has now been compounded by the fact that people have simply run out of money. In addition, the market has been on a downward spiral for the past week.
Like I said, I'm not trying to defend the directors - just simply offering a legitimate explanation where the exit by a big holder can kill a stock. I believe that the stock will recover, but it's going to take time. The relative strength index is currently at 18.8 points and is busting to get back to between 30 and 70 points.
UMC Price at posting:
67.0¢ Sentiment: Hold Disclosure: Held
