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How to Read SEC Filings (LIVE TRADING) - YouTube
Channel: Timothy Sykes
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- You don't know if they're
gonna do the financing,
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you don't know at what price
they're gonna do the financing
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and no matter what price
they do the financing,
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you're not sure if the market's
gonna like it or hate it.
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So there's three big questions there.
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(upbeat music)
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Okay, most of these companies
are gonna go bankrupt.
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Most of these companies have
very little cash on hand,
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so I just expect the worst
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and I'm never disappointed, ya know.
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So like, very rarely will you see me
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hold one of these plays overnight
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that does not have a lot
of cash on their books,
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that has kinda screwed people in the past,
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especially a lot of these biotechs.
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Anytime a biotech has positive data news
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or positive news and the stock spikes big,
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they're so thankful, not because the data
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is gonna be meaningful in the long run,
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just because it gets people
interested in their stock
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and then they can do an offering
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and they can raise enough money
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hopefully to last another few years.
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But then again, you
know, you just don't know
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if they're gonna do the offering or not,
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so it's all a guessing game.
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- [Male Attendee] So yes, so like,
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if we're looking through their,
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okay so right now I got
TTCM up right on the screen.
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- Well TTCM has no product.
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They have no revenues, they have nothing.
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- [Male Attendee] Okay, so let's pick
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a different ticker then.
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- Yeah.
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- [Male Attendee] Maybe--
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- Pick FCEL, they did an offering.
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- [Male Attendee] So
where in the financials,
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so if I go to, should I go to financials?
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- Yeah, click financials.
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- All right.
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I mean, where would we look in here
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to look at their cash and--
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- [Instructor] Balance sheet, middle,
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right above the income
statement there's a little link.
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- Okay, yep.
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- [Instructor] Balance sheet.
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So you can see their current assets.
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So, you know, they still had
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quite a few millions
of dollars in the bank
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and yet they did a financing anyway.
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So this is why--
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- [Male Attendee] So they
got $130 million, right?
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- [Instructor] Well I was just looking
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at the cash and cash equivalent,
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I don't care about
inventory or other stuff.
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But how much cash do they have.
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So they're burning a little cash
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'cause you see here they go from like,
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64 down to 49 down to 39,
so they're burning cash
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but they didn't need to do a
financing, they just did it.
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So this one wasn't even really predictable
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and that's why I think a
lot of people got screwed.
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So, they're basically dropping
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but then for a few days,
they had a nice little run up
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so they used that run up
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as an opportunity to do a financing.
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So they didn't necessarily need it,
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but at the same time, their
stock went from $0.20 to $0.90.
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They took advantage of it.
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- [Male Attendee] When
did they do the offering?
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Does that say here in
Yahoo Finance or not?
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- [Instructor] Uh, no, that was on...
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I know it's the big gap down on the 15th.
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- [Male Attendee] I was
short, too, and I missed it.
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It was going sideways and it was like,
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this thing's not dropping,
I'm not gonna sit here
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and get squeezed the
next day, so I covered
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and then the next day my buddy called,
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"Dude, FCEL, are you still in FCEL short?"
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And I'm like, "No, why."
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And he's like, "Bro, it's down to $0.50."
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- Yeah.
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- [Male Attendee] I'm like, forget you.
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- [Male Attendee] That's
always the way it goes.
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- They did a $30 million offering.
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- [Male Attendee] Where
you finding that out?
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Where'd you see that at?
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- They did, oh well, these
are actually old tweets.
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- Ha, that's funny.
- Oh, Twitter?
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- Hold on, yeah, I just type in Twitter
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and I just typed in FCEL offering.
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Let's see, those were old.
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$27 million, no, that's August.
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Shit, these are all, I
mean, they've done a lot of,
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this is the one thing that they've done,
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they've done a lot of offerings.
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Part of the reason why their
stock is dropping so much
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is because they're just not profitable.
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They don't have a good business model.
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So, whenever the stock is up,
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you don't really even have to look
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at the SEC filings, to tell you the truth.
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If a stock is up that's
priced under a dollar
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and then has like this
long-term downtrend,
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they're just gonna do it.
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They're just gonna raise money.
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- [Male Attendee] They have to.
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They gotta take the opportunity.
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- They had to.
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You know, that's it.
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If you look at, you kinda think like,
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okay, most of these penny
stocks are gonna go bankrupt,
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this is a kinda classy
bankruptcy type chart,
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how do you stave off bankruptcy?
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You have to raise cash.
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How do you raise cash?
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No one's gonna invest in a bankrupt chart,
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oh the stock just tripled
on whatever hype or news,
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let's take advantage of that opportunity.
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Expect the worst out of all of them
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and you won't be disappointed.
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(woman laughs)
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I know it's a sad way
of looking at things,
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but it's true.
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So you can guess, I mean, you can
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go into the SEC filings like, okay,
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what is the cash here, what is that,
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but it's so difficult to say,
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okay this company has $10
million, they will do an offering.
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This company has, I mean
they had $30 million
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and they still did an offering.
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They didn't have to,
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but you just have to kinda
think about this logically.
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And then there's people where
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they say they look through the SEC filings
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and they look at the warrants,
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so then they can convert the
warrants to raise some money
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and then all the short sellers
say this stock has warrants
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and that's their basis for the short.
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And yet, if there's enough volume,
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the warrants are meaningless
and it just runs through it.
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But then also, just to add another thing,
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in case you're not confused enough,
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you don't know if they're
gonna do the financing,
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you don't know at what price
they're gonna do the financing,
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and no matter what price
they do the financing,
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you're not sure if the market's
gonna like it or hate it.
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So there's three big
who-the-fuck-knows questions there.
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Most of the time, they'll do an offering,
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it'll be bad because most of the time,
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they won't be able to raise
the money at current prices,
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especially when it's pumped
up from $0.30 to $0.90.
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So, if you know that there's
gonna be an offering,
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there's probably like a 60 or 70% chance
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that it'll be a toxic financing,
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where they're just willing to sell it
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at a 30, 40, 50% discount
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'cause they're just happy to get money.
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- [Female Attendee] Maybe
it's a silly question.
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Should the--
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- There's no silly questions.
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- [Female Attendee]
Offeree and the financier,
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are they similar?
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- Yes, yeah, so there's many
different ways to raise money,
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either through warrants or
offerings or insider sales.
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There's a whole bunch
of different questions.
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Oh, this is what came out, too, on FCEL.
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They say they may not be able
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to refinance their credit facility.
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So, they're not even sure
they can raise more money.
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- [Male Attendee] Well, they gotta,
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look at this, their last 8-K filing
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they got a notice of delisting
for failure to satisfy
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and continue listing full standard.
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- But that's just because their
price has dropped so much.
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- [Male Attendee] That was July 18th.
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- [Male Attendee] That was 12 days ago.
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- Yeah, I mean, there's
good and bad of everything.
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The biggest thing is that they dropped.
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They dropped big, off their highs.
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And this is pretty standard.
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- [Male Attendee] Yeah, I
totally screwed up that short.
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- But it's okay.
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Now you see, you know,
hopefully you'll have
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more conviction shorting
crappy charts like this.
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- [Female Attendee] Can you measuring
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the stock if there's a warrant
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but most the people say
this stock has warrants,
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it's a good opportunity for me to short.
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- Yes.
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- [Female Attendee] But are
you measuring the influence
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this stock has a big
volume, what do you mean?
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You mean one million, two million?
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- So warrants is basically
just a way to dilute the stock.
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So the warrants get executed,
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there's more shares so theoretically,
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each share is worth less.
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But let's say, you know, when
a stock hits a certain level
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where the warrants execute, so okay,
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so let's say there's three million shares
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that are now activated
because they hit this price.
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Okay, so there's gonna
be three million shares
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that theoretically could be sold
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but if the stock is trading
20, 30 million shares,
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it'll take those three million
and just run right over it
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because there's so much more volume.
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The warrants come into play
when there's not a lot of volume
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and then it creates this
massive thing of selling,
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you know, no different
than insider selling.
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When some insider says,
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"Hey, I'm gonna sell half my position,"
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that's gonna be a drag on the price
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because that's a lot of shares,
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but if the volume is big
enough, it just doesn't matter.
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And a lot of short
sellers are using warrants
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or insider sales or any
kind of negative news
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as reason to short, but
what they fail to understand
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and what they fail to talk about,
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is that all these companies are shit.
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Like, we know that, that's why the stock
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is fucking trading at
$0.30 in the first place.
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So, the negative news, the bad valuation,
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it might already be priced in.
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But shorts are very negative, trollish,
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you know, schmiegel-like figures
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and they just look--
- Trollish?
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- Yeah, very trollish.
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Trolls would be a compliment
to many of these short sellers.
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You know, they're basically like lepers,
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social lepers, physical
lepers, mental lepers.
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They just have diseases galore,
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so they look for the negatives
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because their whole life is miserable
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and so they want everyone
else to be miserable too.
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And we must resist them
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and put them into a
house of their own doing
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and burn it to the ground
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so then lepers never
can be heard from again.
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Hey, Tim Sykes, millionaire
mentor and trader.
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Thank you for watching my videos.
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I hope that they help you.
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I want to share everything that
I've learned over the years.
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You can check out more
videos right over there
[577]
and also, click subscribe so that
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you can watch all of these videos,
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get that knowledge and become
my next millionaire student.
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