Price manipulation of Diamond Management -- DTPI??
I'm not sure about you but I smell something very fishy about the recent price action in Diamond Management & Technology (DTPI) and its acquisition by PriceWaterhouse at $12.50 on August 24th.
You might remember we carried Diamond in the Barchart Van Meerten Speculative portfolio for some time but sold it from the portfolio on August 8th at 9.73 after some really crazy and unexplained price action. The stock was in a trading range around 11 a share when after a pretty normal earnings call on August 4th the stock took an unexplained nose dive from around 11 all the way down to 8.33 in just an hour.
Although the stock recovered in the next few days it continued to trade in the 9.29 to 10.29 range but kept trending downward settling in around 9.50. The stock normally traded between 100K and 200K shares a day. I never could find any reason for the stock to drop and there was no negative press to cause it to keep trending lower.
All of a sudden out of nowhere PriceWaterhouse offers an all cash deal at $12.50 which was an almost 32% premium of the 9.50 price and in a matter of minutes 19+ million shares are traded.
Normal earnings calls do not cause a stock to drop 25% in an hour and then settle lower each day until acquired with a hefty premium.
A lot of people lost money by selling out between August 4th and the buyout announcement on August 24th. If you were one of them you have every right to file an SEC complaint that you feel the stock was manipulated.
Jim Van Meerten is an investor who writes on investing here and on Barchart Portfolio Blogs. Please leave a comment below or email JimVanMeerten@gmail.com.
Disclosure: No positions in the stock mentioned at the time of publication