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12
3
AbitibiBowater4Report:AnalysisofStockPrice,Shorts,andFailstoDeliver5
RevisionNo.26
7
8
9
10
11
12
13
14
15
16
17
Prepared by:18
19
Elizabeth Romero, MSc20
Dr. Henry Romero, CPE, CSP2122
23
24
February 27, 201025
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ExecutiveSummary12
AninterestwasgeneratedinascertainingwhetherthetradingactivityonABWTQhasbeenfollowinga3
definedpattern,especiallyasrelatedtoshortstrading.4
5
DatawasobtainedfromseveralpubliclyavailablesourcesontheinternetincludingETrade,Investors6
Hub,FINRA,StockWatch,FailstoDeliver.com,RegSho(onFINRAwebsite),OTCBB.comand7
NASDAQTrader.com.8
9
Datacollectedincluded: DailyOpen/Close,DailyHigh/Low,DailyPricebeforeandafterbankruptcy(BK),10
VolumeofTrades,DaysFailsThresholdMet,VolumeofReportedShorts,andDailyChangeinPrice(from11
openingprice). Fromthat,acalculationwasmadebeyondtheordinaryreportednumbers. This12
calculationwasthedifferencebetweenthepricesattradingevent+1minustradingevent. Inother13
words,iftherewasatradeexecutedat11:03Aandthenexttradeoccurredat11:04A,thentheprice14
recordedat11:03Aissubtractedfromthepriceat11:04Atogetthedifferenceinprice.15
16
ThefailstodeliverdatapriortoBKshowaninterestingpatternofhighfailsmostlikelybeingdueto17
nakedshorting. Theshortingwasatalevelmeetingthresholdforreportingnearly90%to100%ofthe18
tradingdaysfor11monthspriortoBKaftertheBowatermergerwhichappearsinpartresponsiblefor19
theBK. AfterBK,thepriceseemedtobedriventotherangebetween$.10to$.20USDshortlyafterBK20
andapparentlywaspurposelykepttherebymanipulatingthetradesresultinginapositiveornegative21
differenceinpricealongwiththosethatresultedinnochange. ThefailuresinthefirstfewmonthsofBK22
alsoputpressureonthepriceanddecreasedtheinterestintradingthestock. Wheninterestin23
acquiringthestockincreased,sodidthevolumeofshorts,thuskeepingthepricefairlyflatand24
decreasingupwardmomentumofthestock.25
26
Animportantanalysiswastoexaminethetotalsharevolumetradedpermonthbyeachmarketmaker27
asavailableonOTCBB.com. ThisdataclearlyindicatesthatABLEandNITEarethelargesttradersofthis28
stocksinceBK.29
30
Itisimportanttonotethatthisanalysiscontainsconclusionsdrawnfromasimple,computationaland31
graphicalrepresentationofthedataobtainedfrompublicdatasources. Thisisnotarigorousfinancial32
studyaccordingtoanySECorstandardaccountingpracticesandthereforetheconclusions,while33
illuminatingandunique,shouldbecarefullyconsideredbeforeanyinvestingdecisionsaremade.34
Indeed,donotmakeanyinvestingdecisionsoffofthisdata,period. Itonlyrepresentstheopinionsof35
thepreparersofthisreport.36
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TableofContents12
1. AnalysisofPrice,Volume,Fails,Thresholds,andShorts...................................................................... 63
1.1. Introduction.................................................................................................................................. 64
1.2. AnalysisofPrice............................................................................................................................ 65
1.3. AnalysisofVolumeofTrading...................................................................................................... 86
1.4. AnalysisofShortsTrading........................................................................................................... 107
1.5. AnalysisofFailstoDeliver........................................................................................................... 158
1.6. AnalysisofFailsThresholds......................................................................................................... 209
2. AnalysisofDifferences,Changes,SharesTraded,andPrice.............................................................. 2310
2.1. April2009.................................................................................................................................... 2511
2.2. May2009.................................................................................................................................... 2612
2.3. June2009.................................................................................................................................... 2713
2.4. July2009..................................................................................................................................... 2914
2.5. August2009................................................................................................................................ 3015
2.6. September2009.......................................................................................................................... 3116
2.7. October2009.............................................................................................................................. 3317
2.8. November2009.......................................................................................................................... 3418
2.9. December2009........................................................................................................................... 3519
2.10. All2009................................................................................................................................... 3720
2.11. January2010........................................................................................................................... 3821
3. ShareVolumebyMonth..................................................................................................................... 4022
4. Conclusions......................................................................................................................................... 4523
5. Questionsthatdemandtobeanswered............................................................................................ 4724
25
TableofFigures26Figure1:ClosingPriceforBOW,ABY,ABHandABWTQfromCY2003throughCY2010............................ 727
Figure2:DailyPriceafterBankruptcy.......................................................................................................... 828
Figure3:VolumeofDailyTradesforPast10Yearsthrough2/11/2010...................................................... 929
Figure4:PercentofSharesTradedperTotalSharesAvailableforTrading(54.7M)sinceBankruptcy.....1030
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Figure5:ShortSelling................................................................................................................................. 111
Figure6:DailyVolumeofReportedShortssinceAugust2009.................................................................. 122
Figure7:PercentofShortstoDailyVolumeofSharesTradedsinceAugust2009.................................... 133
Figure8:PercentofShortsperTotalSharesAvailableforTrading(54.7M)sinceAugust2009................144
Figure9:NakedShortSelling...................................................................................................................... 155
Figure10:DailyVolumeofFailstoDeliverfromApril2004throughCY2009(BOWtoABHtoABWTQ)6
(FailsareAggregates).................................................................................................................................. 167
Figure11:DailyVolumeofReportedFailsofAbitibiConsolidated,Inc.April2004toOctober2007(Fails8
areAggregates)........................................................................................................................................... 179
Figure12:DailyVolumeofReportedFailsofABHOctober2007toApril2009(FailsareAggregates).....1810
Figure13:DailyVolumeofReportedFailsofABWTQsinceApril2009(FailsareAggregates)..................1911
Figure14:PercentofFailsperTotalSharesAvailableforTrading(54.7M)sinceApril2009(Failsare12
Aggregates)................................................................................................................................................. 2013
Figure15:DaysandPercentofTradingDaysperMonththatFailsThresholdwasMetCY2005through14
CY2009....................................................................................................................................................... 2115
Figure16:TotalVolumeofSharesTradedperMarketMoverfor2009.................................................... 4216
Figure17:ABLESharesTradedPerMonth................................................................................................. 4217
Figure18:NITESharesTradedPerMonth.................................................................................................. 4318
Figure19:ETMMSharesTradedPerMonth.............................................................................................. 4319
Figure20:UBSSSharesTradedPerMonth................................................................................................. 4420
21
TableofTables22Table1:AverageShortsperTradingVolume............................................................................................. 1423
Table2:CategoriesofSharesTraded......................................................................................................... 2324
Table3:April2009Price,Change,andSharesTradedInformation........................................................... 2525
Table4:April2009DifferencesEvaluation................................................................................................. 2626
Table5:April2009DifferencesDistribution............................................................................................... 2627
Table6:May2009Price,Change,andSharesTradedInformation........................................................... 2728
Table7:May2009DifferencesEvaluation................................................................................................. 2729
Table8:May2009DifferencesDistribution............................................................................................... 2730
Table9:
June
2009
Price,
Change,
and
Shares
Traded
Information
...........................................................
28
31
Table10:June2009DifferencesEvaluation............................................................................................... 2832
Table11:June2009DifferencesDistribution............................................................................................. 2833
Table12:July2009Price,Change,andSharesTradedInformation.......................................................... 2934
Table13:July2009DifferencesEvaluation................................................................................................ 2935
Table14:July2009DifferencesDistribution.............................................................................................. 3036
Table15:August2009Price,Change,andSharesTradedInformation..................................................... 3037
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Table16:August2009DifferencesEvaluation........................................................................................... 311
Table17:August2009DifferencesDistribution......................................................................................... 312
Table18:September2009Price,Change,andSharesTradedInformation............................................... 323
Table19:September2009DifferencesEvaluation..................................................................................... 324
Table20:September2009DifferencesDistribution.................................................................................. 325
Table21:October2009Price,Change,andSharesTradedInformation................................................... 336
Table22:October2009DifferencesEvaluation......................................................................................... 337
Table23:October2009DifferencesDistribution....................................................................................... 348
Table24:November2009Price,Change,andSharesTradedInformation............................................... 349
Table25:November2009DifferencesEvaluation..................................................................................... 3510
Table26:November2009DifferencesDistribution................................................................................... 3511
Table27:December2009Price,Change,andSharesTradedInformation................................................ 3612
Table28:December2009DifferencesEvaluation...................................................................................... 3613
Table29:December2009DifferencesDistribution................................................................................... 3614
Table30:All2009Price,Change,andSharesTradedInformation............................................................ 3715
Table31:All2009DifferencesEvaluation.................................................................................................. 3716
Table32:All2009DifferencesDistribution................................................................................................ 3817
Table33:January2010Price,Change,andSharesTradedInformation.................................................... 3918
Table34:January2010DifferencesEvaluation.......................................................................................... 3919
Table35:January2010DifferencesDistribution........................................................................................ 3920
Table36:SharevolumetradedpermonthbyMarketMaker.................................................................... 4021
Table37:MarketMakerSymbolsandDefinitions...................................................................................... 4122
Table38:SummaryoftheDifferencesintheStandardDeviationsofthePositiveandNegativePrice23
Differencesper2009monthafterBK......................................................................................................... 4524
25
26
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1.AnalysisofPrice,Volume,Fails,Thresholds,andShorts11.1.Introduction2
3
Thefirststepinthisanalysiswastoreviewthehistoricpricefluctuations,thehistoricvolumeoftrades,4
thefailstodeliver,thefailstodeliverthresholds,andtheshorts. Thehistoricpricefluctuationswere5
reviewedforthepast10yearstocoverthetimeofthemergerwithBowaterandthebankruptcy. The6
priceafterbankruptcywasanalyzedseparatelytoprovidemoredataresolution. Thehistorictrade7
volumeswerereviewedforthesamereasonsandalsotoprovidefurtheranalysisinSection2. Afailto8
deliverisrecordedwhenasellerdoesnotprovidethesharesofstockthatweresoldwithintherequired9
3daysettlementtimeframe.FromtheSEC:"Failstodelivercanoccurforanumberofreasonsonboth10
longandshortsales.Therefore,failstodeliverarenotnecessarilytheresultofshortselling,andarenot11
evidenceofabusiveshortsellingornakedshortselling."(Takenfromthefollowingwebsite:12
www.failstodeliver.com)13
14
RegSHOisdesignedtofulfillseveralobjectives,including:(a)theestablishmentofuniformlocateand15
deliveryrequirementsinordertoaddressproblemsassociatedwithfailurestodeliver,and(b)the16
creationofuniformmarkingrequirementsforsalesofallequitysecurities. Accordingly,theNYSEwill17
postalistofthresholdsecuritiesonthissiteforeverysettlementday. TheThresholdListwillnotbe18
generatedonbankholidayswhentheDepositoryTrust&ClearingCorporationisclosedbutequity19
exchangesareopen.(Takenfromthefollowingwebsite:http://www.nyse.com/regulation/nyse/)20
1.2.AnalysisofPrice2122
Figure1showsthedailyClosingpricesforthepast7yearsfortheseparatecompaniesofAbitibi23
ConsolidatedandBowater. Itthendisplaysthepriceaftermergerandthroughbankruptcy(BK). The24
timeperiodcoveredisfromCalendarYear(CY)2003throughCY2009andintothefirstfewweeksofCY25
2010. Itcanbeseenthattherewasanorderlyreductioninpricestartinginearly2005forBowater26
(BOW)andcontinuingthroughthelatterhalfof2007. Thepricedroppedfromaround$45USDto27
around$15USDacrossthattimeforBowater. AbitibiConsolidated(ABY)notedasimilardropinprice28
acrossthesametimeperiodbuttherangewasfromaround$7USDtoaround$2USD. Atthatpoint,29
thetwocompaniesmergedintoAbitibiBowater(ABH)andthesharepricespikedtoaround$36USD.30
Almostimmediately,
the
price
dropped
to
under
adollar
leading
into
the
announcement
of
BK
and
31
stayedtheresince.32
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1Figure1:ClosingPriceforBOW,ABY,ABHandABWTQfromCY2003throughCY20102
Sincethepriceafterbankruptcydroppedbelowadollar,theabovegraphdoesnotprovideany3
resolutionfor
the
price
fluctuations
after
that
point.
Therefore,
Figure
2shows
the
daily
price
after
4
bankruptcy. Ascanbeseen,thepricehitahighshortlyafterbankruptcyandthendroppedtonearly5
$.10USD. Itfluctuatedbetween$.10USDand$.20USDsincethenexceptforthenotablefluctuationin6
October2009. ThereasonforthefluctuationinthepriceinOctoberwasduetotheanticipationofthe7
Hydroassetsale,themorepositiveMOR,andthehighervolumeofpositivechatterhappening. The8
flatnessoftheprice(lackoffluctuation)isinandofitself,remarkable. Mostprices,eveninBK,tendto9
havemorevariation. ThislackofvariationwillbefurtherdiscussedinSection2ofthisreport.10
11
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1Figure2:DailyPriceafterBankruptcy2
1.3.AnalysisofVolumeofTrading34
Thedailytradevolumesforthepast10yearsisdisplayedinFigure3. Itcanbeseenthatthevolumeof5
tradesisflatthrough2005andmostof2006. Startingtowardstheendof2006,thevolumestartedto6
rise. Therewasaspikein2007whichreflectsthemergerwithBowater. Itisimportanttonotethatthe7
tradevolumefluctuatesmuchmoreafterthemergerthanbefore. AfterBKin2009,thetradevolumeis8
less,butitisstillhigherthanbeforemergerandstillfluctuatesmore.9
10
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1Figure3:VolumeofDailyTradesforPast10Yearsthrough2/11/20102
Whiletheactualvolumeoftradesisreflectiveofactivity,thepercentofsharestradedrelativetothe3
totalnumberofsharesavailablefortradingisveryillustrativeofthetradingpatterns. Figure4shows4
thepercentofsharestradedpertotalsharesavailablefortradingsinceBK. Thetotalsharesavailable5
fortradingfromABHareapproximately54.7M. TheanalysisafterBKwaschosenforfurtherstudyfor6
thesamereasonasFigure2lookedatpriceafterBK. ThevolumeoftradingafterBKwasgenerally7
below2%ofthesharesavailablefortradingexceptforsomenotablespikesinJune2009andOctober8
2009. However,eventhosespikesdonotexceed10%. Thisisaverylowtradingvolume. Also,the9
spikeinJunewasnotmatchedwithaspikeinprice,thoughthespikeinOctoberwastemporarily10
reflectedintheprice.11
12
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1Figure4:PercentofSharesTradedperTotalSharesAvailableforTrading(54.7M)sinceBankruptcy2
1.4.AnalysisofShortsTrading34
Infinance,shortselling(alsoknownasshortingorgoingshort)isthepracticeofsellingassets,usually5
securities,thathavebeenborrowedfromathirdparty(usuallyabroker)withtheintentionofbuying6
identicalassets
back
at
alater
date
to
return
to
the
lender.
The
short
seller
hopes
to
profit
from
a
7
declineinthepriceoftheassetsbetweenthesaleandtherepurchase,ashewillpaylesstobuythe8
assetsthanhereceivedonsellingthem.Conversely,theshortsellerwillincuralossifthepriceofthe9
assetsrises.Othercostsofshortingmayincludeafeeforborrowingtheassetsandpaymentofany10
dividendspaidontheborrowedassets.Shortingandgoingshortalsorefertoenteringintoany11
derivativeorothercontractunderwhichtheinvestorprofitsfromafallinthevalueofanasset.(Taken12
fromWikipediahttp://en.wikipedia.org/wiki/Short_(finance)).13
14
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1Figure5:ShortSelling2
ThevolumeofshortsreportedbyFINRAisavailableontheirwebsitebackthroughAugust2009. Data3
priorto
August
2009
has
been
requested
from
SEC
but
so
far
has
not
been
provided.
Figure
6shows
the
4
actualvolumeofshortstradedperdaysinceAugust2009. Itisinterestingtonotethehighvolumeof5
shortsinOctoberwhichiswhenthepricefluctuatedupduetotheanticipationoftheassetsaleandthe6
morepositiveMOR. Notethatthesharecountonthisgraphstartsat50,000andgoesto1.5M.7
8
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1Figure6:DailyVolumeofReportedShortssinceAugust20092
Thedailyvolumeofshortsisdividedbythevolumeofsharestradedthatdaytogetthepercentageof3
sharestradedthatdaythatwereshorts. AscanbeseeninFigure7,thepercentofshortstothevolume4
ofsharestradedsinceAugust2009isfluctuatingsignificantlybetweenzeroand80%. Itappearsthatthe5
volumeofshortsisconsistentlyahighvolumeofthesharestradedwithsufficientrestinbetweento6
allowforsomecoverageoftheshorts.7
8
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1Figure7:PercentofShortstoDailyVolumeofSharesTradedsinceAugust20092
Figure8showsthevolumeofshortstradedperdaydividedbythetotalsharesavailablefortrading3
(54.7M)sinceAugust2009. Thisisexpressedasapercentage. Ascanbeseenthemajorityofthe4
tradingdayssinceAugustendedwiththeshortsbeinglessthan0.5%oftheavailableshares.5
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1Figure8:PercentofShortsperTotalSharesAvailableforTrading(54.7M)sinceAugust20092
Table1showstheaverageoftheshortvolumesdividedbyboththetotalnumberofsharesavailable3
andthesharestradedthatday. Theaverageisamonthlyaveragewiththeaverageforthelastfive4
monthsof2009shownonthelastrowentitledTotal. Ascanbeseen,theaveragevolumeofshorts5
pertotalnumberofsharesavailableislessthan0.3%foreachmonthexceptOctober2009whichdrove6
theoverall
average
to
less
than
the
critical
0.5%.
The
average
shorts
per
day
as
apercentage
of
the
7
sharestradedthatdayhowever,exceeded30%exceptforNovemberandDecember,withDecember8
2009exceeding20%. Thisleftanaverageforthelastfivemonthsof2009nearly30%oftheshares9
tradedperdaybeingshorts.10
11
Table1:AverageShortsperTradingVolume12
AverageShortsperday
DividedbyTotal#Shares
AverageShortsdividedby
sharestradedthatday
Aug 0.27% 31.49%
Sep
0.27%
39.22%
Oct 0.82% 37.87%
Nov 0.13% 13.77%
Dec 0.25% 21.61%
Total 0.35% 28.95%
13
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1.5.AnalysisofFailstoDeliver12
Nakedshortselling,ornakedshorting,isthepracticeofsellingafinancialinstrumentshortwithoutfirst3
borrowingthesecurityorensuringthatthesecuritycanbeborrowedasisdoneinaconventionalshort4
sale.
When
the
seller
does
not
obtain
the
shares
within
the
required
time
frame,
the
result
is
known
as
5
a"failtodeliver". Thetransactiongenerallyremainsopenuntilthesharesareacquiredbytheseller,or6
theseller'sbroker,allowingthetradetobesettled. Nakedshortingisnotnecessarilyaviolationofthe7
federalsecuritieslawsortheSEC'srules. Butitisillegalwhenmanipulatorsusethepracticetoforce8
stockpricesdownbytemporarilyincreasingthesupplyofstockorinotherwaysmanipulatingthestock9
price. Notcoveringtheshortsisreportedasathresholddayifcertainrequirementsdiscussedin10
Section1.6aremet. (excerptedfromhttp://en.wikipedia.org/wiki/Naked_short_selling)11
12
13
Figure9:NakedShortSelling14
Failurestodelivermayresultfromeitherashortoralongsale.Theremaybelegitimatereasonsfora15
failuretodeliver.Forexample,humanormechanicalerrorsorprocessingdelayscanresultfrom16
transferringsecuritiesinphysicalcertificateratherthanbookentryform,thuscausingafailureto17
deliveronalongsalewithinthenormalthreedaysettlementperiod.Afailmayalsoresultfromnaked18
shortselling.Forexample,marketmakerswhosellshortthinlytraded,illiquidstockinresponseto19
customerdemandmayencounterdifficultyinobtainingsecuritieswhenthetimefordeliveryarrives20
(takenfrom:http://www.sec.gov/spotlight/keyregshoissues.htm).21
22
Itisimportanttonotethatthefailstodeliverdataareaggregates. Thismeansthatthefailstodeliver23
fromDay1thatarenotcoveredbyDay2areaddedtoDay2andsoforth. FromtheSEC:"Thevaluesof24
totalfailstodeliversharesrepresenttheaggregatenetbalanceofsharesthatfailedtobedeliveredas25
ofaparticularsettlementdateifthebalanceis10,000sharesormore.Iftheaggregatenetbalanceof26
sharesthatfailedtobedeliveredislessthan10,000asofaparticularsettlementdate,thennorecord27
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willbepresentinthefileforthatdateeveniftherearefailsinthatsecurity.Failstodeliveronagiven1
dayareacumulativenumberofallfailsoutstandinguntilthatday,plusnewfailsthatoccurthatday,2
lessfailsthatsettlethatday.Thefigureisnotadailyamountoffails,butacombinedfigurethatincludes3
bothnewfailsonthereportingdayaswellasexistingfails."(excerptedfromthefollowingwebsite:4
www.failstodeliver.com).5
6
Bowater,Inc,wasmergedwithAbitibiConsolidatedattheendofOctober2007. Figure10showsthe7
volumeoffailsforBowater,Inc.,(BOW)fromFebruary2004throughthemergerandthrough8
bankruptcytilltheendofCY2009. Ascanbeseen,thequantityoffailswasverylowthroughtothelast9
quarterof2006atwhichitbegantoincrease. Theincreasepeakedin2007forfourmonthspriortothe10
merger.11
12
13Figure10:DailyVolumeofFailstoDeliverfromApril2004throughCY2009(BOWtoABHtoABWTQ)(FailsareAggregates)14
Figure11showsthevolumeoffailsforAbitibiConsolidated,Inc.(ABY)fromApril2004throughtothe15
merger. Ascanbeseen,thequantityoffailswereupsomein2005andearly2006buttailedoffinthe16
secondquarterof2006atwhichtimeitbegantosteadilyincreaseagain. Theincreasepeakedin200717
atthetimeofthemerger.18
19
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1Figure11:DailyVolumeofReportedFailsofAbitibiConsolidated,Inc.April2004toOctober2007(FailsareAggregates)2
Toprovidemoredetail,Figure12depictsthedailyvolumeofreportedfailsfromOctober30,2007,to3
April2009(BK)rememberingthatfailsareaggregates. Thereisasignificantvolumeoffailstodeliverin4
thenearlytwelvemonthsleadinguptoSeptember2008. AfterSeptember,2008,thevolumeoffails5
dropssharplyexceptforaspikeinJanuary2009. Thereisasignificantvolumeoffailsshortlyaroundthe6
time
of
the
BK
announcement.
7
8
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1Figure12:DailyVolumeofReportedFailsofABHOctober2007toApril2009(FailsareAggregates)2
Figure13depictsthedailyvolumeofreportedfailssinceApril2009(BK)rememberingthatfailsare3
aggregates. ThereisasignificantvolumeoffailsshortlyaroundthetimeoftheBKannouncementand4
theyremainedhighthroughJuly2009. TheyremainedlowafterthatexceptforaspikeinDecember5
2009.
6
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1Figure13:DailyVolumeofReportedFailsofABWTQsinceApril2009(FailsareAggregates)2
Figure14depictsthepercentageoffailstothetotalsharesavailablefortrading(54.7M)sinceApril20093
(BK). Ascanbeseen,themajorityofthedayssawthefailstobedeliveredtobelessthan0.5%ofthe4
totalavailableshares. Byhavingtheleveloffailslessthanonehalfofonepercentofthetotalavailable5
shares,theyavoidthethresholdforreporting.6
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1Figure14:PercentofFailsperTotalSharesAvailableforTrading(54.7M)sinceApril2009(FailsareAggregates)2
1.6.AnalysisofFailsThresholds34
Thefailstodeliverarereportedasathresholdsecurityundercertaincircumstances. AThreshold5
SecurityisdefinedbyRule203(c)(6)oftheSEC'sRegulationSHOasanyequitysecurityofanissuerthat6
isregistered
under
Section
12,
or
that
is
required
to
file
reports
pursuant
to
Section
15(d)
of
the
7
ExchangeActwhereforfiveconsecutivesettlementdays:(1)thereareaggregatefailstodeliverata8
registeredclearingagencyof10,000sharesormorepersecurity;(2)theleveloffailsisequaltoatleast9
onehalfofonepercentoftheissuer'stotalsharesoutstanding;and(3)thesecurityisincludedonalist10
publishedbyaselfregulatoryorganization.(Takenfromthefollowingwebsite:11
http://www.nyse.com/regulation/nyse/)12
13
Figure15showsthedaysthatthefailsmetthethreecriteriaforthresholdreportingaswellasthe14
percentoftradingdayspermonththatthresholdweremetfromCY2005throughCY2009. CY200515
throughmerger
between
Abitibi
and
Bowater
(November
2007)
is
data
for
Abitibi
only.
Bowater
was
16
reviewedforthresholdsmetforthattimeperiod,butnonewerefound. Theareasonthegraphs17
markedinablueboxaretheperiodaftermergerandpriortothebankruptcyannouncement.18
Therefore,thisdataisABHorAbitibiBowater,Inc. Theareamarkedwithayellowboxisforthemerged19
companyafteritannouncedbankruptcy.20
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1Figure15:DaysandPercentofTradingDaysperMonththatFailsThresholdwasMetCY2005throughCY20092
Priortothemerger,therewerefewdaysthethresholdwasmet. Immediatelyaftermerger,thenumber3
ofdaysthethresholdwasmetjumpedtobetween90%to100%ofthetradingdayspermonthforeight4
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oftheninemonthsimmediatelyafterthemerger. Intheelevenmonthsbetweenmergerand1
bankruptcy,thethresholdwasmetabout70%ofthetradingdaysintwoofthemonthsthatitdidnot2
risetoabove90%. August2008metthethresholdnearly40%ofthetime. Immediatelyafterthe3
announcementofbankruptcy,therewasasteadyriseinthepercentofdaysthethresholdwasmet4
whichpeakedinJuly2009. Itisimportanttonotethatthefailsthresholdwasnotmetforthemonths5
fromSeptember2009throughDecember2009dueatleastinpartbecausethefailstodelivervolume6
waslessthanonehalfofonepercentoftheoverallsharesavailablefortrading.7
8
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2.AnalysisofDifferences,Changes,SharesTraded,andPrice12
Theprevioussectionofthisreportdealtwithvolumeoftrades,shorts,failsandhistoricaldatarelatedto3
thresholds,andprice. However,thisinformationdoesnotillustratewhetherthesefluctuationsand4
activityhad
any
effect
on
the
stock
price.
This
next
section
looks
at
the
price
and
how
it
was
affected
by
5
theintradaytradingsinceBK. Severalpiecesofdatawerecollectedincludingthetimingoftheintraday6
tradingevent,theactualpriceassociatedwitheachtradingevent,thechangeinthatpricefromthe7
openingpricefortheday,andthenumberofsharestradedinthatevent. Toanalyzethisdatamore8
effectively,thesharestradedwerebinnedintoeightdifferentcategories. Thesecategoriesareshownin9
thefollowingtable. Alongsidethecategorylabelisthemaximumpercentageofthetotalavailable10
sharesfromtheissuerthatthecategorycouldrepresent.11
12
Table2:CategoriesofSharesTraded13
Category PercentofTotalAvailableShares
1100 0.0002%
1011,000 0.0018%
1,0015,000 0.0091%
5,00110,000 0.0183%
10,00125,000 0.0457%
25,00150,000 0.0914%
50,001100,000 0.1828%
Morethan100K Morethan0.18%
14
ForeachmonthsinceBKthroughJanuary2010,thedatawasanalyzedforthefollowing. First,the15
changeand
the
price
were
evaluated
to
identify
the
Mode,
Median,
Average,
Maximum,
Minimum,
and
16
StandardDeviation. Modeisthemostfrequentlyoccurringvalueinagivensetofnumbers. Medianis17
themiddlevalueofthegivensetofnumberswhensortedinascendingorder. Averageisdefinedasthe18
sumofallthegivennumbersdividedbythetotalamountofnumbers. Themorecloselythemedianis19
totheaveragedemonstrateshowtightthedistributionis. Inotherwords,theaverageishighly20
impactedbythespreadofthedataversusthemedian. Ifthemedianandtheaveragearenearlyequal,21
thedataspreadislow. Themaximumisthegreatestvalueinthegivensetofnumbersandthe22
minimumistheleast. Thestandarddeviationisthestatisticalmeasureofspreadorvariabilityoftheset23
ofnumbers. Thestandarddeviationistherootmeansquare(RMS)deviationofthevaluesfromtheir24
arithmeticmean.
In
other
words,
the
higher
the
standard
deviation
then
the
greater
is
the
spread.
Also,
25
ifthedataisnormallydistributed,thenonestandarddeviationplusorminusfromtheaverageshould26
encompass95%ofthedatapoints.27
28
Thevolumeofthesharestradedandthetradingeventswerefurtheranalyzedforthestandard29
deviationinthenumberofsharespertradingevent,theaveragenumberofsharespertradingevent,30
thetotalnumberoftradingevents,andsumofthesharestraded.31
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1
Fortheanalysisoftheeffectofeachtradingevent,thevalueknownasdifferenceiscalculated.2
DifferenceiscalculatedbysubtractingthepriceatTradingEvent1fromthepriceattheimmediately3
subsequentTradingEvent2andsoon. Itisademonstrationofthechangeinpriceassociatedwitheach4
tradingeventandamoreeffectivemeasurethancomparingagainsttheopeningpriceforthedaywhich5
isknownaschange. Ifthedifferencecalculationresultedinanegative,thismeansthatthepriceat6
TradingEvent2islowerthanthepriceatTradingEvent1. Ifthedifferencecalculationresultedina7
positive,thismeansthatthepriceatTradingEvent2ishigherthanthepriceatTradingEvent1. Ifthe8
differencecalculationresultedinanone,thismeansthatthepriceatTradingEvent2isequaltothe9
priceatTradingEvent1. Itisalsoimportanttoknowthatthefirsttradeofthedayiscomparedagainst10
thelasttradeofthepreviousdaytogetthedifferenceassociatedwiththefirsttradeoftheday.11
12
Afterallthedifferencesforeachtradingeventarecalculated,theyaresortedintopositive,negativeand13
noneandthecountsofeachareshowninthesecondofthesetofthreetablesineachmonth. The14
percentofeventsthatresultedinanegativedifferenceiscalculatedbydividingthetotalnumberof15
negativeeventsbythetotalnumberoftrades. Thepercentofeventsthatresultedinapositive16
differenceiscalculatedbydividingthetotalnumberofpositiveeventsbythetotalnumberoftrades.17
Thepercentofeventsthatresultedinnodifferenceiscalculatedbydividingthetotalnumberofnone18
eventsbythetotalnumberoftrades. Theaveragepositivedifferenceiscalculatedbysummingthe19
amountofthepositivedifferencesanddividingbythenumberofpositiveevents. Similarcalculations20
wereperformedforthenegativeandnonedifferenceevents. Foreachtypeofevent(positiveor21
negative),themaximumandminimumvalueisdisplayedasisthestandarddeviation. Thestandard22
deviationforthepositiveandnegativedifferencesisobtainedfromthedifferencesinpriceofthe23
resultingtrades.24
25
Tounderstandtheimpactthetradingvolumehadontheshareprice,thepositive,negative,andnone26
differencesassociatedwitheachcategoryarecountedasisthenumberofeachcategoryofshare27
volumetradingeventanddisplayedinthethirdofthesetofthreetablesineachmonth. Inother28
words,thenumberoftradingeventspercategorywascountedfirstandistitledTotalunderthe29
Countsheading. Thenumberoftradespercategoryresultinginapositivedifference(priceincreased)30
isdisplayedundertheheadingPositiveundertheCountsheading.Thenumberoftradesper31
categoryresultinginanegativedifference(pricedecreased)isdisplayedundertheheadingNegative32
underthe
Counts
heading.
The
number
of
trades
per
category
resulting
in
ano
difference
(price
33
unchanged)isdisplayedundertheheadingNoneundertheCountsheading. Addingthenumber34
ofeventsineachdifferencetypewillprovidethesamecountasthetotalpereachcategory. Addingup35
thetotalcountsforeachcategoryprovidesthenumberoftradingeventsdisplayedundertheheading36
TotalNo.ofTradesinthefirstofthesetofthreetablesineachmonth.37
38
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TheheadingDistributionofDifferencesperCategoryinthethirdofthesetofthreetablesineach1
monthisameasureoftheimpacteachcategoryhadonthechangeintheshareprice. Thetotalcount2
oftradingeventspercategoryaredividedbythetotalnumberoftradingeventsforthemonthand3
displayedunderTotalundertheheadingDistributionofDifferencesperCategoryinthethirdofthe4
setofthreetablesineachmonth. Nexttothiscolumnisthedistributionofthosetradingeventsinto5
whethertheresultwaspositiveornegativeorunchangedinprice. Inotherwords,inApril2009,10%of6
thetradeswereassociatedwithtradeshaving100sharesorlessand24%ofthetimethosetradeswith7
100sharesorlesswereassociatedwithapositivechange,27%ofthetimetheywereassociatedwitha8
negativechangeand48%ofthetimetheyresultedinnochange.9
10
2.1.April20091112
AprilisthefirstmonthofBK. Theaveragepricewas$0.1359USDonatotalof36.3Msharestraded.13
Theaverage
number
of
shares
per
trade
is
12,947
which
represent
0.02%
of
the
total
available
shares
14
fromtheissuer. Thetotalnumberoftradingeventswas2,802. Ofinterestisthefactthat38%ofthe15
tradesresultedinnochangeintheprice. Thepercentoftradesthatresultedinapositivedifference16
was30%andthepercentoftradesthatresultedinanegativedifferencewas32%. Thevariabilityinthe17
positiveandnegativedifferencesinpriceasdemonstratedbythestandarddeviationofthedifferences18
isremarkablysimilarwiththedifferenceinthestandarddeviationsonlybeing0.0006. Theaverage19
positivedifferenceis0.0007greaterthantheaveragenegativedifference.20
21
Thetradesthathadavolume100sharesorlessaccountedfor10%ofthetradeswithnearlyonequarter22
ofthem
(24%)
resulting
in
apositive
difference
and
27%
resulting
in
anegative
difference
in
price.
This
23
meansthatoverhalfofthetradingeventsassociatedwithvolumeslessthan100shareswereassociated24
withapricethatwaseitherlessormorethantheimmediatelyprecedingprice. Halfofthetradeshad25
volumesbetween5,000and25,000shareswhichfitwiththeaveragesharespertrade. Ofthetrade26
eventsbetween5,000and10,000trades,overhalfofthemresultedinnochangeintheprice. Ofthe27
tradeeventsbetween10,000and25,000trades,nearly40%ofthemresultedinnochangeintheprice.28
Nearly90%ofthetradingeventsweretradeswithavolumelessthan50,000. Ofthese,morethanone29
third(35%)ofthemresultedinnochangeinprice.30
31
Table3:
April
2009
Price,
Change,
and
Shares
Traded
Information
32
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0000 0.0021 0.0400 0.0300 0.0168
Price 0.1400 0.1350 0.1359 0.2500 0.1000 0.0184
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
54,709 12,947 2,802 36,277,849
33
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Table4:April2009DifferencesEvaluation1
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 841 30% 0.0116 0.0600 0.0003 0.0105
Negative 906 32% 0.0109 0.0700 0.0001 0.0099
None
1055
38%2
Table5:April2009DifferencesDistribution3
Apr09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 289 70 79 140 10% 24% 27% 48%
1011,000 306 121 133 52 11% 40% 43% 17%
1,0015,000 492 176 201 115 18% 36% 41% 23%
5,00110,000 852 203 205 444 30% 24% 24% 52%
10,00125,000 561 165 175 221 20% 29% 31% 39%
25,00150,000 157 54 57 46 6% 34% 36% 29%
50,001100,000
97
35
37
25
3%
36%
38%
26%
Morethan100K 48 17 19 12 2% 35% 40% 25%
4
2.2.May200956
May2009isthesecondmonthofBK. Theaveragepricewas$0.1526USDonatotalof14.4Mshares7
traded. Theaveragenumberofsharespertradeis6,075whichrepresent0.01%ofthetotalavailable8
sharesfromtheissuer. Thetotalnumberoftradingeventswas2,369. Ofinterestisthefactthatover9
half(57%)ofthetradesresultedinnochangeintheprice. Thepercentoftradesthatresultedina10
positivedifference
was
21%
and
the
percent
of
trades
that
resulted
in
anegative
difference
was
22%,
11
nearlyidentical. Theactualnumberofnegativetradesexceededthenumberofpositivetradesbyonly12
15trades. Thevariabilityinthepositiveandnegativedifferencesinpriceasdemonstratedbythe13
standarddeviationofthedifferencesisremarkablysimilarwiththedifferenceinthestandarddeviations14
onlybeing0.0003. Theaveragepositivedifferenceis0.0003greaterthantheaveragenegative15
difference,whichisnearlynegligible.16
17
Thetradesthathadavolume100sharesorlessaccountedfor20%ofthetradeswithnearlyhalfof18
them(44%)resultinginapositivedifferenceand39%resultinginnodifferenceinprice. Thismeansthat19
nearlytwo
thirds
of
the
trading
events
associated
with
volumes
less
than
100
shares
were
associated
20
withapricethatwaseitherlessormorethantheimmediatelyprecedingprice,mostofthembeing21
positive. Nearlyhalfofthetrades(48%)hadvolumesbetween1,000and10,000shareswhichfitwith22
theaveragesharespertrade. Ofthetradeeventsbetween1,000and5,000trades,nearlytwothirdsof23
them(61%)resultedinnochangeintheprice. Ofthetradeeventsbetween5,000and10,000trades,24
nearlythreequartersofthem(71%)resultedinnochangeintheprice. Nearly95%ofthetradingevents25
weretradeswithavolumelessthan50,000. Ofthese,morethanhalf(55%)ofthemresultedinno26
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changeinprice. Itisinterestingtonotethattherewere10tradeswithmorethan100,000shareseach1
and60%ofthemresultedinnochangeinprice.2
3
Table6:May2009Price,Change,andSharesTradedInformation4
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0025 0.0023 0.0275 0.0240 0.0093
Price 0.1400 0.1500 0.1526 0.1950 0.1200 0.0145
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
13,620 6,075 2,369 14,390,843
5
Table7:May2009DifferencesEvaluation6
Events
Countof
Events
PercentvsTotal
NumberofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 498 21% 0.0059 0.0400 0.0001 0.0037
Negative 513 22% 0.0056 0.0200 0.0001 0.0034
None 1358 57%
7
Table8:May2009DifferencesDistribution8
May09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 470 208 78 184 20% 44% 17% 39%
1011,000 351 76 113 162 15% 22% 32% 46%
1,0015,000 554 99 115 340 23% 18% 21% 61%
5,00110,000 585 57 110 418 25% 10% 19% 71%
10,00125,000 304 39 69 196 13% 13% 23% 64%
25,00150,000 63 13 16 34 3% 21% 25% 54%
50,001100,000 32 6 8 18 1% 19% 25% 56%
Morethan100K 10 0 4 6 0% 0% 40% 60%
9
2.3.June20091011
June2009isthethirdmonthofBK. Theaveragepricewas$0.1717USDonatotalof19.5Mshares12
traded. Theaveragenumberofsharespertradeis6,757whichrepresent0.01%ofthetotalavailable13
sharesfromtheissuer. Thetotalnumberoftradingeventswas2,890whichwereabout500morethan14
lastmonth. Ofinterestisthefactthatnearlytwothirds(61%)ofthetradesresultedinnochangeinthe15
price.
The
percent
of
trades
that
resulted
in
a
positive
difference
was
19%
and
the
percent
of
trades
16
thatresultedinanegativedifferencewas20%,nearlyidentical. Theactualnumberofnegativetrades17
exceededthenumberofpositivetradesbyonly36trades. Thevariabilityinthepositiveandnegative18
differencesinpriceasdemonstratedbythestandarddeviationofthedifferencesisidenticalwithno19
differenceinthestandarddeviations. Theaveragepositivedifferenceis0.0002greaterthanthe20
averagenegativedifference,whichisnearlynegligible.21
22
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Thetradesthathadavolume100sharesorlessaccountedfor24%ofthetradeswithnearlyhalfof1
them(49%)resultinginapricedifference. Ninetyfourpercent(94%)ofthetradeshadvolumesless2
than25,000shareswhichfitwiththeaveragesharespertradeandthestandarddeviationoftheshares3
pertrade. Overhalfofallthetradesineachcategoryunder25,000resultedinnochangeinprice. Itis4
interestingtonotethattherewere13tradeswithmorethan100,000shareseachandnearlyone5
quarterofthem(23%)resultedinnochangeinprice.6
7
Table9:June2009Price,Change,andSharesTradedInformation8
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0000 0.0064 0.3600 0.0300 0.0192
Price 0.1700 0.1720 0.1717 0.5300 0.1220 0.0223
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
16,904 6,757 2,890 19,526,439
9
Table10:June2009DifferencesEvaluation10
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 552 19% 0.0059 0.3500 0.0001 0.0150
Negative 586 20% 0.0057 0.3600 0.0001 0.0150
None 1752 61%
11
Table11:June2009DifferencesDistribution12
Jun09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 695 245 97 353 24% 35% 14% 51%
1011,000 434 55 132 247 15% 13% 30% 57%
1,0015,000 619 100 126 393 21% 16% 20% 63%
5,00110,000 605 94 123 388 21% 16% 20% 64%
10,00125,000 357 35 68 254 12% 10% 19% 71%
25,00150,000 111 18 19 74 4% 16% 17% 67%
50,001100,000 56 4 12 40 2% 7% 21% 71%
Morethan100K 13 1 9 3 0% 8% 69% 23%
13
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2.4.July200912
July2009isthefourthmonthofBK. Theaveragepricewas$0.1191USDonatotalof8Msharestraded.3
Theaveragenumberofsharespertradeis5,368whichrepresentlessthan0.01%ofthetotalavailable4
shares
from
the
issuer.
The
total
number
of
trading
events
was
1,493
which
were
about
1,300
less
than
5
lastmonth. Ofinterestisthefactthatnearlyhalf(48%)ofthetradesresultedinnochangeintheprice.6
Thepercentoftradesthatresultedinapositivedifferencewas26%andthepercentoftradesthat7
resultedinanegativedifferencewas26%,identical. Thevariabilityinthepositiveandnegative8
differencesinpriceasdemonstratedbythestandarddeviationofthedifferencesisidenticalwithno9
differenceinthestandarddeviations. Theaveragepositivedifferenceis0.0001greaterthanthe10
averagenegativedifference,whichisnearlynegligible.11
12
Thetradesthathadavolume100sharesorlessaccountedfor23%ofthetradeswith41%resultingin13
nopricedifferencemeaningthat59%(overhalf)ofthetradeswith100sharesorlessresultedinaprice14
difference. Ninetysixpercent(96%)ofthetradeshadvolumeslessthan25,000shareswhichfitwith15
theaveragesharespertradeandthestandarddeviationofthesharespertrade. Nearlytwothirdsof16
thetradesbetween5,000and25,000sharesresultedinnochangeinprice. Itisinterestingtonotethat17
therewere20tradesbetween50,000and100,000sharesand60%ofthemresultedinnochangein18
price.19
20
Table12:July2009Price,Change,andSharesTradedInformation21
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0050 0.0049 0.0160 0.0250 0.0090
Price
0.1200
0.1200
0.1191
0.1450
0.0950
0.0102
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
11,000 5,368 1,493 8,013,965
22
Table13:July2009DifferencesEvaluation23
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 391 26% 0.0073 0.0200 0.0003 0.0042
Negative 392 26% 0.0072 0.0200 0.0005 0.0042
None 710 48%
24
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Table14:July2009DifferencesDistribution1
Jul09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 337 150 50 137 23% 45% 15% 41%
1011,000 337 93 121 123 23% 28% 36% 36%
1,0015,000
319
76
100
143
21%
24%
31%
45%
5,00110,000 248 27 63 158 17% 11% 25% 64%
10,00125,000 183 25 39 119 12% 14% 21% 65%
25,00150,000 45 15 13 17 3% 33% 29% 38%
50,001100,000 20 4 4 12 1% 20% 20% 60%
Morethan100K 4 1 2 1 0% 25% 50% 25%
2
2.5.August200934
August2009isthefifthmonthofBK. Theaveragepricewas$0.1416USDonatotalof8.9Mshares5
traded. Theaveragenumberofsharespertradeis4,676whichrepresentlessthan0.01%ofthetotal6
availablesharesfromtheissuer. Thetotalnumberoftradingeventswas1,894whichwereabout3007
morethanlastmonth. Ofinterestisthefactthatnearlyhalf(45%)ofthetradesresultedinnochangein8
theprice. Thepercentoftradesthatresultedinapositivedifferencewas27%andthepercentoftrades9
thatresultedinanegativedifferencewas28%,whichisnearlyidentical. Thevariabilityinthepositive10
andnegativedifferencesinpriceasdemonstratedbythestandarddeviationofthedifferencesis.000111
whichisnearlyidentical. Theaveragepositivedifferenceis0.0001greaterthantheaveragenegative12
difference,whichisnearlynegligible.13
14
Thetrades
that
had
avolume
100
shares
or
less
accounted
for
15%
of
the
trades
with
49%
resulting
in
15
nopricedifferencemeaningthat51%(overhalf)ofthetradeswith100sharesorlessresultedinaprice16
difference. Ninetysixpercent(96%)ofthetradeshadvolumeslessthan25,000shareswhichfitwith17
theaveragesharespertradeandthestandarddeviationofthesharespertrade. Overhalfofthetrades18
werebetween100and5,000shares. Itisinterestingtonotethattherewere263tradesover10,00019
withbetweenhalfandtwothirdsofthemresultinginnochangeinprice.20
21
Table15:August2009Price,Change,andSharesTradedInformation22
Mode Median Average Maximum Minimum StdDev
Change
0.00000.0050
0.0048
0.0200
0.0330
0.0078
Price 0.1400 0.1400 0.1416 0.1750 0.1100 0.0110
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
10,919 4,676 1,894 8,855,595
23
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Table16:August2009DifferencesEvaluation1
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 518 27% 0.0080 0.0340 0.0001 0.0045
Negative 522 28% 0.0079 0.0230 0.0001 0.0044
None 854 45%
2
Table17:August2009DifferencesDistribution3
Aug09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 287 78 67 142 15% 27% 23% 49%
1011,000 736 285 213 238 39% 39% 29% 32%
1,0015,000 387 93 112 182 20% 24% 29% 47%
5,00110,000 221 20 59 142 12% 9% 27% 64%
10,00125,000 178 25 54 99 9% 14% 30% 56%
25,00150,000 55 6 14 35 3% 11% 25% 64%
50,001100,000 26 10 2 14 1% 38% 8% 54%
Morethan100K 4 1 1 2 0% 25% 25% 50%
4
2.6.September200956
September2009isthesixthmonthofBK. Theaveragepricewas$0.1515USDonatotalof7.4Mshares7
traded. Theaveragenumberofsharespertradeis5,019whichrepresentlessthan0.01%ofthetotal8
availablesharesfromtheissuer. Thetotalnumberoftradingeventswas1,473whichwereabout4009
lessthanlastmonth. Ofinterestisthefactthatoverhalf(58%)ofthetradesresultedinnochangein10
theprice.
The
percent
of
trades
that
resulted
in
apositive
difference
was
21%
and
the
percent
of
trades
11
thatresultedinanegativedifferencewas21%,whichisidentical. Thevariabilityinthepositiveand12
negativedifferencesinpriceasdemonstratedbythestandarddeviationofthedifferencesis.000113
whichisnearlyidentical. Theaveragepositivedifferenceis0.0002greaterthantheaveragenegative14
difference,whichisnearlynegligible.15
16
Thetradesthathadavolume100sharesorlessaccountedfor17%ofthetradeswith49%resultingin17
nopricedifferencemeaningthat51%(overhalf)ofthetradeswith100sharesorlessresultedinaprice18
difference. Ninetysixpercent(96%)ofthetradeshadvolumeslessthan25,000shareswhichfitwith19
the
average
shares
per
trade
and
the
standard
deviation
of
the
shares
per
trade.
Over
half
of
the
trades
20
werebetween100and5,000shareswithbetweenhalfandtwothirdsoftheseresultinginnochangein21
price. Itisinterestingtonotethattherewere14tradesover50,000withbetweentwothirdsandthree22
quartersofthemresultinginnochangeinprice.23
24
25
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Table18:September2009Price,Change,andSharesTradedInformation1
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0050 0.0032 0.0230 0.0250 0.0070
Price 0.1500 0.1500 0.1515 0.1740 0.1200 0.0090
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
9,405
5,019
1,473
7,392,434
2
Table19:September2009DifferencesEvaluation3
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 315 21% 0.0069 0.0250 0.0001 0.0044
Negative 306 21% 0.0071 0.0200 0.0001 0.0045
None 852 58%
4
Table20:September2009DifferencesDistribution5
Sep09 Counts DistributionofDifferencesperCategory
Category
Total
Positive
Negative
None
Total
Positive
Negative
None
1100 249 68 59 122 17% 27% 24% 49%
1011,000 405 126 99 180 27% 31% 24% 44%
1,0015,000 363 56 61 246 25% 15% 17% 68%
5,00110,000 195 28 36 131 13% 14% 18% 67%
10,00125,000 205 27 37 141 14% 13% 18% 69%
25,00150,000 42 8 12 22 3% 19% 29% 52%
50,001100,000 11 2 1 8 1% 18% 9% 73%
Morethan100K 3 0 1 2 0% 0% 33% 67%
6
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2.7.October200912
October2009istheseventhmonthofBK. Duringthismonth,theanticipationoftheHydroassetsale,3
themorepositiveMOR,andahighervolumeofpositivechatterwasnoted.Theaveragepricewas4
$0.2206
USD
on
a
total
of
28.6M
shares
traded.
This
was
the
largest
number
of
shares
traded
in
a
single
5
monthexceptforApril2009. Theaveragenumberofsharespertradeis9,241whichrepresentlessthan6
0.01%ofthetotalavailablesharesfromtheissuer. Thetotalnumberoftradingeventswas3,095which7
wereaboutdoublethenumberoftradeslastmonth. Ofinterestisthefactthatoverhalf(58%)ofthe8
tradesresultedinnochangeinthepricewhichwasexactlythesamepercentageaslastmonth. The9
percentoftradesthatresultedinapositivedifferencewas21%andthepercentoftradesthatresulted10
inanegativedifferencewas21%,whichisidenticaltoeachotherandlastmonth. Thevariabilityinthe11
positiveandnegativedifferencesinpriceasdemonstratedbythestandarddeviationofthedifferences12
isnoneornearlyidentical. Theaveragepositivedifferenceisnogreaterthantheaveragenegative13
difference.14
15
Thetradesthathadavolume100sharesorlessaccountedfor15%ofthetradeswith51%resultingin16
nopricedifferencemeaningthat49%(nearlyhalf)ofthetradeswith100sharesorlessresultedina17
pricedifference. Ninetypercent(90%)ofthetradeshadvolumeslessthan25,000shareswhichfitwith18
theaveragesharespertradeandthestandarddeviationofthesharespertrade. Over75%ofthetrades19
werebetween101and25,000shareswithbetweenhalfand60%oftheseresultinginnochangein20
price. Itisinterestingtonotethattherewere32tradesover100,000withonly3%ofthemresultingin21
nochangeinpriceandtwothirdsofthemresultingindecreasingtheprice.22
23
Table21:October2009Price,Change,andSharesTradedInformation24
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0000 0.0105 0.1100 0.0700 0.0374
Price 0.2700 0.2200 0.2206 0.3400 0.1250 0.0592
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
16,901 9,241 3,095 28,601,476
25
Table22:October2009DifferencesEvaluation26
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive
656
21%
0.0064
0.0500
0.0001
0.0056
Negative 649 21% 0.0064 0.0500 0.0001 0.0052
None 1790 58%
27
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Table23:October2009DifferencesDistribution1
Oct09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 464 117 86 261 15% 25% 19% 56%
1011,000 381 89 98 194 12% 23% 26% 51%
1,0015,000
748
140
139
469
24%
19%
19%
63%
5,00110,000 644 124 133 387 21% 19% 21% 60%
10,00125,000 548 113 106 329 18% 21% 19% 60%
25,00150,000 187 41 36 110 6% 22% 19% 59%
50,001100,000 91 21 31 39 3% 23% 34% 43%
Morethan100K 32 11 20 1 1% 34% 63% 3%
2
2.8.November200934
November2009istheeighthmonthofBK. Theaveragepricewas$0.1502USDonatotalof9.7M5
sharestraded.
This
was
the
largest
number
of
shares
traded
in
asingle
month
except
for
April
2009.
6
Theaveragenumberofsharespertradeis6,479whichrepresentlessthan0.01%ofthetotalavailable7
sharesfromtheissuer. Thetotalnumberoftradingeventswas1,495whichwereabouthalfthe8
numberoftradeslastmonth. Ofinterestisthefactthatnearlytwothirds(61%)ofthetradesresulted9
innochangeintheprice. Thepercentoftradesthatresultedinapositivedifferencewas18%andthe10
percentoftradesthatresultedinanegativedifferencewas21%,whichindicatesadownwardpressure11
intheprice. Thevariabilityinthepositiveandnegativedifferencesinpriceasdemonstratedbythe12
standarddeviationofthedifferencesis.0002whichisnearlynegligible. Theaveragepositivedifference13
is.0005greaterthantheaveragenegativedifference,thoughsincetherewereagreatnumberof14
negativetrades,
the
price
pressure
was
downward.
15
16
Thetradesthathadavolume100sharesorlessaccountedfor14%ofthetradeswith62%resultingin17
nopricedifference. Ninetyfourpercent(94%)ofthetradeshadvolumeslessthan25,000shareswhich18
fitwiththeaveragesharespertradeandthestandarddeviationofthesharespertrade. Twothirdsof19
thetradeswerebetween101and10,000shareswithnearlytwothirdsoftheseresultinginnochange20
inprice. Itisinterestingtonotethattherewere3tradesover100,000withtwothirdsofthemresulting21
innochangeinprice.22
23
Table24:
November
2009
Price,
Change,
and
Shares
Traded
Information
24
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0050 0.0036 0.0320 0.0330 0.0106
Price 0.1300 0.1450 0.1502 0.2050 0.1150 0.0206
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
12,991 6,479 1,495 9,686,733
25
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Table25:November2009DifferencesEvaluation1
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 274 18% 0.0067 0.0250 0.0001 0.0045
Negative 307 21% 0.0062 0.0250 0.0001 0.0047
None 914 61%
2
Table26:November2009DifferencesDistribution3
Nov09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 211 53 27 131 14% 25% 13% 62%
1011,000 318 60 76 182 21% 19% 24% 57%
1,0015,000 356 56 83 217 24% 16% 23% 61%
5,00110,000 312 52 62 198 21% 17% 20% 63%
10,00125,000 210 39 36 135 14% 19% 17% 64%
25,00150,000 61 8 13 40 4% 13% 21% 66%
50,001100,000
24
6
9
9
2%
25%
38%
38%
Morethan100K 3 0 1 2 0% 0% 33% 67%
4
2.9.December200956
December2009istheninthmonthofBK. Theaveragepricewas$0.1265USDonatotalof15.5M7
sharestraded. Theaveragenumberofsharespertradeis6,381whichrepresentlessthan0.01%ofthe8
totalavailablesharesfromtheissuer. Thetotalnumberoftradingeventswas2,427whichwereabout9
1,000moretradesthanlastmonth. Ofinterestisthefactthatnearlytwothirds(64%)ofthetrades10
resultedin
no
change
in
the
price.
The
percent
of
trades
that
resulted
in
apositive
difference
was
18%
11
andthepercentoftradesthatresultedinanegativedifferencewas18%,whichisidentical. The12
variabilityinthepositiveandnegativedifferencesinpriceasdemonstratedbythestandarddeviationof13
thedifferencesis.0001whichisnearlynegligible. Theaveragepositivedifferenceisequaltothe14
averagenegativedifference.15
16
Thetradesthathadavolume100sharesorlessaccountedfor16%ofthetradeswith64%resultingin17
nopricedifference. Ninetyfivepercent(95%)ofthetradeshadvolumeslessthan25,000shareswhich18
fitwiththeaveragesharespertradeandthestandarddeviationofthesharespertrade. Twothirdsof19
thetrades
were
between
101
and
10,000
shares
with
nearly
two
thirds
of
these
resulting
in
no
change
20
inprice. Itisinterestingtonotethattherewere10tradesover100,000withtheirimpactonprice21
nearlyevenlydistributedbetweenpositive,negative,andnone.22
23
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Table27:December2009Price,Change,andSharesTradedInformation1
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0020 0.0002 0.0551 0.0350 0.0165
Price 0.1100 0.1152 0.1265 0.2100 0.1000 0.0249
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
12,474
6,381
2,427
15,487,572
2
Table28:December2009DifferencesEvaluation3
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 438 18% 0.0050 0.0198 0.0001 0.0037
Negative 445 18% 0.0050 0.0197 0.0001 0.0036
None 1544 64%
Table29:December2009DifferencesDistribution4
Dec09 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 379 68 67 244 16% 18% 18% 64%
1011,000 482 68 107 307 20% 14% 22% 64%
1,0015,000 600 112 105 383 25% 19% 18% 64%
5,00110,000 495 87 85 323 20% 18% 17% 65%
10,00125,000 345 67 58 220 14% 19% 17% 64%
25,00150,000 86 22 12 52 4% 26% 14% 60%
50,001100,000 30 11 7 12 1% 37% 23% 40%
Morethan100K 10 3 4 3 0% 30% 40% 30%
5
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2.10. All200912
Allof2009afterApril22,2009,representsthefirstcalendaryearofBK. Theaveragepricewas$0.15693
USDonatotalof138.9Msharestraded. Theaveragenumberofsharespertradeis7,125which4
represent
less
than
0.01%
of
the
total
available
shares
from
the
issuer.
The
total
number
of
trading
5
eventswas19,487. Ofinterestisthefactthatnearlyhalf(54%)ofthetradesresultedinnochangein6
theprice. Thepercentoftradesthatresultedinapositivedifferencewas23%andthepercentoftrades7
thatresultedinanegativedifferencewas23%,whichisidentical. Thevariabilityinthepositiveand8
negativedifferencesinpriceasdemonstratedbythestandarddeviationofthedifferencesis.00039
whichisverysmall. Theaveragepositivedifferenceis.0005lessthantheaveragenegativedifference.10
11
Thetradesthathadavolume100sharesorlessaccountedfor17%ofthetradeswith51%resultingin12
nopricedifference. Ninetythreepercent(93%)ofthetradeshadvolumeslessthan25,000shares13
whichfitwiththeaveragesharespertradeandthestandarddeviationofthesharespertrade. Two14
thirdsofthetradeswerebetween101and10,000shareswithoverhalfoftheseresultinginnochange15
inprice. Itisinterestingtonotethattherewere113tradesover100,000withnearlyonequarterof16
themhavingnochangeinprice.17
18
Table30:All2009Price,Change,andSharesTradedInformation19
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0000 0.0018 0.3600 0.0700 0.0202
Price 0.1400 0.1470 0.1569 0.5300 0.0950 0.0426
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
17,636
7,125
19,487
138,854,023
20
Table31:All2009DifferencesEvaluation21
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 4432 23% 0.0077 0.3550 0.0001 0.0090
Negative 4552 23% 0.0075 0.3600 0.0001 0.0087
None 10503 54%
22
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Table32:All2009DifferencesDistribution1
2009 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 3377 1063 608 1706 17% 31% 18% 51%
1011,000 3741 983 1095 1663 19% 26% 29% 44%
1,0015,000
4396
919
1036
2441
23%
21%
24%
56%
5,00110,000 3917 652 841 2424 20% 17% 21% 62%
10,00125,000 2793 515 625 1653 14% 18% 22% 59%
25,00150,000 784 177 189 418 4% 23% 24% 53%
50,001100,000 366 94 101 171 2% 26% 28% 47%
Morethan100K 113 29 57 27 1% 26% 50% 24%
2
2.11. January201034
January2010isthetenthmonthofBKandthefirstmonthof2010. Theaveragepricewas$0.1286USD5
onatotalof7.8Msharestraded. Theaveragenumberofsharespertradeis8,330whichrepresentless6
than0.01%ofthetotalavailablesharesfromtheissuer. Thetotalnumberoftradingeventswas9347
whichwereabout1,500lesstradesthanlastmonth. Ofinterestisthefactthatnearlytwothirds(61%)8
ofthetradesresultedinnochangeintheprice. Thepercentoftradesthatresultedinapositive9
differencewas19%andthepercentoftradesthatresultedinanegativedifferencewas20%,whichis10
nearlyidentical. Thevariabilityinthepositiveandnegativedifferencesinpriceasdemonstratedbythe11
standarddeviationofthedifferencesis.0004whichismorevariabilitythanpreviousmonths. The12
averagepositivedifferenceis.0004morethantheaveragenegativedifference.13
14
Thetradesthathadavolume100sharesorlessaccountedfor19%ofthetradeswith56%resultingin15
nopricedifference. Ninetythreepercent(93%)ofthetradeshadvolumeslessthan25,000shares16
whichfitwiththeaveragesharespertradeandthestandarddeviationofthesharespertrade. Two17
thirdsofthetradeswerebetween1,000and25,000shareswithnearlytwothirdsoftheseresultingin18
nochangeinprice. Itisinterestingtonotethattherewere8tradesover100,000withthreequartersof19
themresultinginnochangeinprice.20
21
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Table33:January2010Price,Change,andSharesTradedInformation1
Mode Median Average Maximum Minimum StdDev
Change 0.0000 0.0000 0.0030 0.0360 0.0230 0.0118
Price 0.1250 0.1290 0.1286 0.1600 0.1010 0.0130
StdDevShares/Trade AvgShares/Trade TotalNo.ofTrades TotalSumofTrades
16,084
8,330
934
7,780,136
2
Table34:January2010DifferencesEvaluation3
Events
Countof
Events
PercentvsTotalNumber
ofTrades
Average
Difference
Maximum
Difference
Minimum
Difference
StdDevof
Difference
Positive 175 19% 0.0052 0.0177 0.0001 0.0036
Negative 188 20% 0.0048 0.0150 0.0001 0.0030
None 571 61%
4
Table35:January2010DifferencesDistribution5
Jan10 Counts DistributionofDifferencesperCategory
Category Total Positive Negative None Total Positive Negative None
1100 173 40 36 97 19% 23% 21% 56%
1011,000 126 20 39 67 13% 16% 31% 53%
1,0015,000 188 35 34 119 20% 19% 18% 63%
5,00110,000 209 39 26 144 22% 19% 12% 69%
10,00125,000 177 32 39 106 19% 18% 22% 60%
25,00150,000 34 6 8 20 4% 18% 24% 59%
50,001100,000 19 2 5 12 2% 11% 26% 63%
Morethan100K 8 1 1 6 1% 13% 13% 75%
6
7
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3. ShareVolumebyMonth12
ThetotalsharevolumespereachmonthoftradingsinceBK(April2009)foreachmarketmakerwas3
reviewedtoascertainfirstiftherewereanypatternstobeseenandsecondtoidentifythemajor4
traders.This
data
was
gathered
from
the
website
www.OTCBB.com.
5
6
Table36:SharevolumetradedpermonthbyMarketMaker7
8
9
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Table37:MarketMakerSymbolsandDefinitions1Symbol MarketMakerDefinition Symbol MarketMakerDefinition
ABLE NatixisBleichroederLLC MERQ MERCATORASSOCIATES,LLC
ARCA ArchipelagoTradingServices MITR MillerTabakRobertsSec
AUTO AutomatedTradingDesk MURF MurphyandDurieu
BMOC BMOCapitalMarketsCorp. NBSI BMOCapitalMarketsCorp.
BTIG BTIG,LLC NITE KnightEquityMarkets,L.P.
CANT Cantor,Fitzgerald&Co. NOBL NobleInternationalInvest.
CARR CarrSecuritiesCp. PALC PaliCapital
COWN CowenandCompany,LLC PERS PershingLLC
CSTI CollinsStewartLLC PERT PERSHINGTRADINGCOMPANY,L.P
DBAB DeutscheBancAlexBrown PUMA PumaCapital,Llc
DOMS DomesticSecurities,Inc. RAJA Raymond,James&Associates
DRCO DahlmanRose&Company,LLC RCMP RaffertyCapitalMarkets,LLC
ETMM E*TradeCapitalMarketsLlc SALI Sterne,Agee&Leach,Inc.
FANC Finance500,Inc. SBSH CitigroupGlobalMarketsInc.
FBCO CreditSuisseSecuritiesUSA SEAB SeaboardPlanningCorp.
FORT TiconderogaSecuritiesLLC SSGI SetonSecuritiesGroupInc
GSCO Goldman,Sachs&Co. STEW COLLINSSTEWARTINC
HDSN HudsonSecurities,Inc. STXG StockcrossFinancialServices
JEFF
Jefferies&
Company,
Inc.
SUFI
Susquehanna
Financial
Group,
LABS LaBrancheFinancialServices UBSS UBSSecuritiesLLC
LAMP LampostCapital,L.C. VERT TheVerticalTradingGroup
LFCM LighthouseFinancialGroup,LLC VFIN vFinanceInvestments,Inc.
MAXM MaximGroupLLC VNDM VandhamSecurities
WEED WeedenandCo.Inc.
2
ThedatainTable36issummarizedinFigure16. Nite(KnightEquityMarkets,L.P.)isthelargesttrader3
ofABWTQsecuritiestradingover42.8MsharesfromAprilthroughDecember2009. ABLE(Natixis4
BleichroederLLC)isthesecondlargesttraderwithalittlelessthan41.6MsharestradedfromApril5
throughDecember2009. Bothofthesecombinedtoover56%ofthetotalsharestradedfromApril6
throughDecember
2009.
The
next
two
highest
traders
over
that
time
period
were
ETMM,
E*Trade
7
CapitalMarketsLLC,(13.4Mshares)andUBSS,UBSSecuritiesLLC(10.5Mshares).8
9
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1Figure16:TotalVolumeofSharesTradedperMarketMoverfor20092
WhilethetotaltradingamountsfromAprilthroughDecember2009areshowninFigure16,the3
followinggraphsdepictthepatternoftrades.4
5
6Figure17:ABLESharesTradedPerMonth7
Figure17showsadefinitedecreasingtrendintradingthroughSeptember2009forABLEwithalarge8
spikeinOctober2009.9
10
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1
2Figure18:NITESharesTradedPerMonth3
Figure18showsadefinitedecreasingtrendintradingthroughSeptember2009forNITEwithaspikein4
October2009.5
6
7 Figure19:ETMMSharesTradedPerMonth8
Figure19showsthatETMMisthelargestretailmarketmakertraderforABWTQfromApril20099
throughDecember2009,thoughitisobviousthevolumeoftradingforETMMisfarbelowthatofNITE10
orABLEforthesametimeperiod.11
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1 Figure20:UBSSSharesTradedPerMonth2
Figure20showsthatUBSStradingpatternisfairlysteadyfromApril2009throughDecember2009,3
thoughitisobviousthevolumeoftradingforUBSSisfarbelowthatofNITEorABLEforthesametime4
period.5
6
ThetradingvolumesandpatternswouldindicatethatABLEandNITEhavehadthelargestimpacton7
ABWTQstradinghistoryandJanuary2010sdataseemstoshowthetrendcontinuing.8
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1
4. Conclusions23
ThefailstodeliverdatapriortoBKshowaninterestingpatternofhighfailsmostlikelybeingdueto4
nakedshorting. Theshortingwasatalevelmeetingthresholdforreportingnearly90%to100%ofthe5
tradingdaysfor11monthspriortoBKaftertheBowatermerger. Apparently,whateverentityor6
entitieswasshortingthesystemknewBKwasonthehorizonforearly2009andneededtoclearthefails7
forthecalendaryear2008andavoidthemforthefinalquarterof2008. Apparently,therulesofBK8
allowedthemtorestarttheshortingprocessforonequarterafterBKatalevelmeetingthethreshold,9
butthentheleveloffailswasheldtobelow0.5%ofthetotalavailablesharesforfiveconsecutivedays10
specificallytoavoidreporting. Itshouldbeacknowledgedthattheanalysisoftheshortingdatais11
incompleteastheSEChasyettoprovidetheshortinginformationrequestednearlyfiveweeksago.12
13
AfterBK,thepriceseemedtobedriventotherangebetween$.10to$.20USDshortlyafterBKand14
apparentlywaspurposelykepttherebymanipulatingthetradesresultinginapositiveornegative15
differenceinpricewiththosethatresultedinnochange. Thismanipulationisobviousfromthetiming16
ofthetrades,thelackofdifferenceinthevariabilityofthepositiveandnegativedifferencetradesas17
showninTable38,andthesimilarityintheaverageofthepositiveandnegativetrades.18
19
Table38:SummaryoftheDifferencesintheStandardDeviationsofthePositiveandNegativePriceDifferencesper200920monthafterBK21
2009MonthafterBKDifferencebetween PositiveDifferenceStandardDeviationandNegative
DifferenceStandardDeviation
April
.0006
May .0003
June .0000
July .0000
Aug .0001
Sept .0001
Oct .0004
Nov .0002
Dec .0001
Totalofthetrading
eventsfor2009.0003
22
ThefailuresinthefirstfewmonthsofBKalsoputpressureonthepriceanddecreasedtheinterestin23
tradingthestock. Wheninterestinacquiringthestockincreased,sodidthevolumeofshorts,thus24
keepingthepricefairlyflatanddecreasinganyupwardmomentumofthestock.25
26
AfterBK,thereweretwobumpsintradingactivity:October2009andDecember2009. October200927
wasduetotheexpectationofanassetsaleandthefactthattheMORwaslessredthanprevious28
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monthscombinedwithsignificantpositivechatterregardingthecompanyanditsstock. December20091
waswhentheMORshowedanetoperatingprofitandtheassetsaleoccurred. Interestingly,the2
bumpinpriceandactivitywashigherinOctober2009thanDecember2009.3
4
ThesheervolumeoftradingandthepatternoftradingfromNITEandABLEbothseemtoindicatethat5
thesetwomarketmakersaretheonlytwomakersthathavebeentradingwithsufficientvolumeto6
accountamajorityofthefailstodeliverthathaveoccurredsinceBK.7
8
Theconclusionsfromthisanalysisarebeingofferedfrompeoplewithlimitedunderstandingofthestock9
market,ABH(orABWTQ),andthepaper/forestryindustryingeneralbutwithanexpertlevelknowledge10
ofstatisticsandapassionforduediligence. Peoplewithgreaterunderstandingofthesetopicsare11
askedtoreviewthedatapresentedhereandofferotherobservationsandconclusions.12
13
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5.Questionsthatdemandtobeanswered12
Theconclusionsfromthisreportleaveitspreparerswithseveralcriticalquestionsthatdemandtobe3
answeredbytheSECandtheAbitibiBowatermanagement. Thesequestionsaredetailedbelow.4
1. Itappears
the
announcement
of
merger
of
Abitibi
and
Bowater
in
January
2007
was
the
catalyst
5
fortheshortingofABH,withlargefailstodeliver. Thepreparersofthisreportaresignificant6
shareholdersanddemandtoknowwhatAbitibiBowatermanagementhasdoneandwilldoin7
ordertostopthispracticeasthecompanyemergesfromBK. Howwillthisplanbe8
communicatedtotheshareholdersandhowwilltheshareholdersbeabletoadvise9
management?10
2. DoestheSECknowthattherehasbeenextensiveshortingofthisstockwithahighvolumeof11
failstodeliverpriortoBKwiththethresholdmet? Ifso,whataretheplansforaddressingthis12
andhowwillthecompanyandshareholdersberedressed? Ifnot,thenwhataretheplansfor13
AbitibiBowatermanagementtoworkwiththeSEConthisissue?14
3. The
preparers
of
this
report
demand
to
know
who
would
benefit
from
the
shorting
process
as
15
79%ofthetradingdaysduringBKsawtheshortsaccountingforbetween10%and80%ofdays16
tradingvolumesincethisseemstobepartiallyresponsiblefortheflatnessinthestockprice?17
4. FormostmonthsafterBK,thestandarddeviationsforthepositiveandnegativedifference18
tradingeventswerenearlyidenticalasweretheaverages. Suchcontrolinvariabilityisnearly19
impossibleforanonmanipulatedstocktradinginapublicmarketwithoutsignificant,willful20
effort. Therefore,thepreparersofthisreportdemandtoknowhowwilltheSECand21
AbitibiBowatermanagementacttopreventmanipulationofthepricethroughresolutionofBK22
andafterwards?23
5. Ingeneral,adiscountbrokerchargesbetween$7USDto$20USDpertradewithnondiscount24
brokerschargingevenmore. AftertheannouncementofBK,therewere3,313tradingevents25
thatwere
100
shares
or
less
or
17%
of
the
overall
trading
events.
Since
the
price
was
kept
flat
26
between$.10USDand$.20USDoverthattimeperiod,thevalueof100sharesrangedfrom$1027
USDto$20USDmeaningtherewasnofinancialgainandoftensomelossassociatedwiththese28
tradingevents. Couldthisbeindicativeofthestockmanipulationthatappearstobe29
happening,especiallyasthisoftenresultedinapositiveornegativechangeinthestockprice?30
6. SinceitappearsheavymanipulationofthestockpriceoccurredpriortoBKandafterthe31
Bowatermergerandappearstostillbeoccurring,thepreparersofthisreportdemandtoknow32
theplanforidentifyingtheentityorentitiesmanipulatingthestockpriceandthegain33
anticipatedbythoseentities. Thisiscrucialinpreventingmanipulationinmovingforwardand34
inredressingthelossestodate. WhatisAbitibiBowatermanagementsplantoverifythestock35
manipulationandidentifytheentityorentitiesresponsible?36
37