the bot working us over

I have been thinking about the bot.
This is a long post but for those who have been annoyed by the SHE bot please stay with me. Some of you may have seen similar bots working your other stocks.
To paraphrase Randoi’s post 15 Aug, the bot is like a Mexican bandit shuffling his drink from one hand to the other. His post made me think.
Why shuffle?
What is he waiting for?
The good guy to go for his gun?
What is the game for him?
On 14 Aug I posted that the Buyer was making the market by being the Seller, selling to himself at the buy price and thereby holding the price at the Buy price.
By way of example, the first off Buyer was at say, 2.2 and was offering a parcel of say 506,282 shares at 2.2. A small sale, let say 4912 goes through and at the same time the total offered by the Buyer at 2.2 drops by exactly 4912. Then a few minutes later a slightly different sale, say 5,216 goes through at 2.2 and the total offered by the Buyer at 2.2 drops by exactly 5,216. Then a few minutes later another parcel of 4,789 goes through at 2.2 and the Buyer’s offering drops by 4,789 and so on. I also noted that the time between these sales was exactly the same, down to the number of seconds. It could not be random or human executed.
The key is, that Buyer controls the market at 2.2 and below until his half a million shares are swapped from one hand to the other.

The bot is certainly not there just to piss us off, like some anti-uranium hero - they are all ideology and no logic. The bot exists to make money.

Some bots aim to balance portfolios against the ASX averages. Look at the small sales in most ASX 100 companies on many days, often multiple sales of just one share. I can’t see a real problem with this.
The high frequency trading is all mind boggling to me but the guys running these deals have PhDs in maths and Physics. Yes Physics, see The Physics of Wall Street by James Weatherall, a great read.
But don’t get SHE out of perspective, when it comes to weightings on the ASX, or arbitrage opportunities, SHE simply does not rate.
So, if the bot exists to make money, how is it going to happen?

‘The Mexican’ shuffles his drink and pushes the price down; why?
So when good news comes he can buy in at 1.3 instead of say 2.6, where the market was before the bot appeared? Unlikely.
Good news may be too hot when it happens. He might be able to pick up a few hundred thousand shares before it is back at 2.6 but he will be up against other buyers.
Note: the bot is a buyer, if good news hits he is out of the money very quickly.
Suggesting the bot aims to drive down the price to buy in at a lower price is too simplistic.

At a superficial level, I my first thoughts were the net change in the bot’s shareholding since it started is very close to zero. But now I suspect this assumption is wrong. The Mexican shuffle is a side game, one designed to hold or push the price down while the main game is to build a portfolio as cheaply as possible.
If he keeps it up he could quietly pick up several million shares under 2.5 and just be waiting for the next good news. It might run to 3.6 and the whole procedure might start again. It doesn’t matter where the price runs to, 4.2 or 2.8, just that when the initial buying slows the bot restarts. How does it work? I can see two elements; so long as the market is not hot then the ‘Mexican’ bot goes to work holding the price, then using psychology 101 – the pain of a loss is far greater than the joy of a profit of the same size - selling to himself he causes some in the market to blink. It is spooking us, that is what he wants. Those who have a profit take it; those who are down the hole, sell to limit their pain.
The bot sells his holding to himself over a couple of days, with no net change in holding. Then puts a buy in for his original holding, one price point lower and starts again. Along the way he, in the side game, is buying the shares of those who got spooked.
I know the data is there; the sales and the timing, the buyers and the sellers, the net changes in Registry holdings.
A question is, does this constitute market manipulation? What hope do short term traders have when this kind of behaviour is tolerated or ignored; I can’t see how the traders can hold their pot in the long term.
The Ann Report is out in Sept, we might be able to compare last year’s Top 20 to this year’s and see who has stepped in. Number 20 held about 2.5 mill.
But then again the information could be hidden in a number of vehicles or bought on behalf of a number of clients.

But in the meantime, anyone who controls the bot must have serious financial backing. The cost of building the bot and running it is simply not worth a million shares times a one cent profit, even if they can do it two or three times over; that is of the order $30k, perhaps. The bot requires a better return. If the objective is to build a significant holding why stand in the market? Buyers will hold firm and he pays more. The classic phrase is, buy on weakness; so the bot creates the weakness.
If this is even close, the desire to build a significant holding is Very interesting.
Someone with the resources to build and run the bot against SHE shareholders must have some belief in the potential of SHE? That would be interesting because organisations with the resources to build and run a bot are typically not holders, they are short term. That begs a further question, does some significant player see significant short term benefits in SHE. That is, is the end play, or major news close?
May I repeat, the bot is there to make money, not to run a whacko jacko cause, or just pee us off.