Great Article on Short Selling - Protecting Giants from Slingshots

Discussion in 'Wall St. News' started by THE-BEAKER, Jul 22, 2008.

  1. nonam


    A New Form Of Naked Shorting??????

    I am at my wits end on what to do about this new problem.

    I know of no other way to contact you and have no idea how to proceed. It is happening again. Now the rules have changed. Apparently the bad guys have found a way to implement an algorithmic program that skirts the deficiency guidelines and can drive virtually any stock they want down to zero. I wouldn’t even approach you or anyone without exhaustive research and tick by tick examination of my findings.

    I speak personally of one company I won’t mention here but suffice it to say its management and board are a veritable “who’s who” of their respective sector, the retail world, and international conglomerates.

    Without the exact resources I seek, I cannot tell if it is just one party playing through multiple accounts, or perhaps 2-3, acting in concert to drive the stock down to zero. I do know through personal contact with countless traders and investors that our miscreants have found a way to stop people from buying stock in the company. When I say “buying stock” I would be referring to lots of size that could dramatically increase the price of the stock. They are preventing orders of size from crossing at the asking price. I now personally know of 16 million shares that have attempted to buy over the past 30 days and not one order has been filled. The stock now averages between 100-200K a day instead of around a million like it used to. Everyone knows if the ask on a stock is not allowed to print, a stock can never go higher.

    The three market makers in SBSH, NITE, and UBSS are parked on the current bid and ask every day. At the open, a standard 5000 or 10000 shares hits the bid and takes it out daily. So, the stock is always down every day. The stock may go as much as 1-4 hours without a share crossing the tape. Or, every trade that goes through is on the bid. The message boards are full of messages of people trying to buy. Their order is in since the open at the current asking price, or even dramatically higher to assure a complete fill, and they are getting nothing. Then messages on the same boards will suddenly show that certain people have gotten fills to buy, yet no trade has crossed the tape in maybe an hour or two. And even worse, they will get a fill but at the same time they fill, a lot (fill) of shares crosses the tape at the same time as their fill for a completely different share amount.

    Apparently our miscreants have found a way to credit some people with buys that never cross the tape. They are selling stock from one account to another to drive the price lower. They are not allowing block buys at the ask or above to cross the tape. They always show the stock negative. They have stripped the stock of 93% of its value to all time lows in 15 months. The stock has gone lower on 41 of 45 positive press releases in the past 2 years.

    A great sales run and then a couple light quarters. Now, the company is on the verge of a host of new product releases and is sitting on four consecutive 100%+ revenue quarters in a row and its first profitability. The bad guys have stripped the market cap from $280 million to $18 million. Insiders have been buying all they are allowed to. There are no insider or institution sells in many months. The CEO and the Board are at a loss for what to do. The investors are at a loss for what to do. The SEC and NASD are not responding to anyone.

    Ordinarily, if I wanted to buy 100K of stock and wanted it now, I could take a market order. However, market maker games suggest an order of that size would cause the market makers in the system to lift their orders and the buyer could get a significantly higher fill. So, a limit order is always used. To assure a fill, a buyer would take out the current ask and perhaps slightly above. Any remaining shares become the current bid and if more buyers do the same, the price moves up without our big buyer getting a complete fill.

    When our bad guys on this stock choose to allow an order to buy to execute and cross the tape, that does not happen. This is what they do. If the bid is 8 and the ask is 9 and our buyer wants 25K at 9, he puts them in limit 10. He gets a few at 9 and not a single share ever prints at 10. They sit there and sit there and sit there and the bid is 8 and the ask is 10. His remaining shares NEVER show a bid of 9. Suddenly, trade after trade goes through at 9 and our buyer gets all his shares, or maybe he sees none of them cross the tape but he looks and suddenly has a complete fill without the shares printing on the tape. It changes every day. Then the ask drops back to 9. Then a few sells hit the bid at 8 and suddenly the bid is 7 and the ask is 8. The next day, it starts all over again.

    It’s not about the story of this company. That’s why I didn’t say what it is. But it is about how this can be happening with the story that is out there. If it wasn’t for the story, individuals would not have discovered this and have it escalated to where it is now. I cannot believe this is an isolated issue to this stock. There has to be countless others. This particular stock hasn’t been on the SHO list in over a year. This current phase of the attack has been going on for 5 months every day, however, I believe it is a continuation of a plan that has been in place for a couple years. It just has taken on a new form.

    They must be stopped. They can be stopped
  2. Nine experienced extensive short selling; and in six of these, subsequent corporate developments and resulting lower price levels demonstrated short sellers to be substantially correct in their assessment of the company.

    In the remaining three companies, the mastication of short sellers was clearly based on conflicting opinion and appraisals of future profit potential in a particular industry. Short sellers apparently misjudged the market for these companies. (Pollack Report, page 60)

    My comment:

    If we regulate short selling the first 6 out of 9 should not see pps decline.

    If we regulate rumors (conflict of opinion from the shorts) none of the 9 should see a decline.

    (btw "mastigate" = to grind teeth)
  3. Imo, when I see the word "miscreants" in a post I think of John 3:16.

    "I tell you the truth, no one can see the kingdom of Byrne unless he is born again" John 3:16
  4. But don't you understand? These fine folks are protecting an unsuspecting public from pump and dump fraud. How do we know if the CEO is a crook? We haven't even gone through his trash yet. And the employees we planted at your company haven't finished their research. Just who are you, demanding to exist. Outrageous.

    I have heard the above story a thousand times. Companies working on head and neck cancer treatments to vehicles to protect Marines. It's always the same. And Cox fiddles.
  5. wenzi


    stop buying penny stocks
  6. They don't start out that way.
  7. never heard of anything like noams rant.

    whats the name of this pos, id like to buy a million shares of it.
  8. Copy and paste noams rant on Yahoo OSTK, you'll probably get a half a dozen similiar strategies and amens over there. I used to write fiction occasionally and post on yahoo. jk
  9. just think of this. If the members of the NYSE are so frightened of 19 financials, what would happen if they took the same measures on the other 590 stocks on SHO? That doesn't take into account the hundreds of stocks 'grandfathered' in fails.

    Sedona Corporation was told over four years ago the naked shorts numbered 70 million. Has to be higher now. The target was zero. Last year, 8.5 million traded all year long. And this is a company that survives. Try to buy 90 million in a stock that trades 50,000 a day.

    And you wonder why the SEC drags its feet. IT 's because there is not enough money in the system to buy back the fails. That's why the SEC keeps after pennies and trys to delist them.
    #10     Jul 22, 2008