By Cydney Posner
For your Friday afternoon amusement, this article from Bloomberg discusses the sudden increase in trading these last two weeks in a delisted penny stock, Myriad Entertainment & Resorts Inc. Why did Myriad become such a hot item? A new resort or entertainment park? A new movie or casino? Well, no….
It turns out that Myriad's ticker symbol is MYRA, and it just so happens that one of President Obama's proposals in his State of the Union address was for a new retirement program called "a MyRA, a play on ‘my IRA.'….So naturally a bunch of dingbats bought MYRA stock after the president's speech, either because they are easily confused people or because they believe in the greater-fool theory and figured there are bigger dingbats out there who would pay more for the stock than they did. Since Obama's speech, MYRA has risen to 1/10th of a cent ($0.001) from 1/100th of a cent ($0.0001), which is a 900 percent gain -- enough to ensure that the story would get picked up by multiple financial bloggers."
Even more amusing is the fact that "almost 1 million MYRA shares were traded on Jan. 17, more than a week before the State of the Union address. Coincidence? Maybe not. But let's assume the absolute worst for argument's sake: That somebody who knew in advance what the speech would say was smart enough to figure out that greater-fool theorists would drive up the price of MYRA after the president's speech to Congress -- and bought 983,069 shares on Jan. 17 in hopes of profiting. At 1/100th of a penny a share, that would be about $98. But as a blog post at thelongshorttrader pointed out, that day's trading volume was the most in the company's entire history….. Is this sleazy? Perhaps, if someone in Obama's inner circle was involved. Is it insider trading? I can't imagine that it is. How could it be? There was no information about the company or the stock in the president's speech. If information isn't real, it can't be confidential, making misappropriation impossible. So there would have been no duty to refrain from speculating that a bunch of dummies would try a dumb thing just because the president mentioned a new government program that had the same name as an insignificant penny stock's ticker symbol. Those people deserve to be parted from their lunch money."
A penny (stock) for your thoughts?