Repost from RB:
By: Francois_Goelo
Reply To: 4266 by knowledgemaster
Saturday, 26 Jun 1999 at 12:29 AM EDT
Post # of 4273
KM, the volume (quantity) can be very misleading,
as, what you want is QUALITY, in other words, REAL TRADES of REAL SHARES, as
opposed to lots of cross trades between MM's and selling of "PHANTOM NAKED
SHORTS", those shares that don't legally exist and have no CERTIFICATES to back them
up.
Earlier, this month, I thought the MM's had started to "BLIND COVER", which happens when
the lead selling MM, Fahnestock in this case, remains on the offer but do a lot of cross trades
with other MM's to confuse the issues. It becomes difficult to tell the real trades from the
crosses and I thought they were using this technique to slowly cover their short positions and
it may well have been the case at that time.
However, on the day we had this 846,000 shares traded, it became evident to observers
close to the action, that a lot of these trades were again of the "short naked" kind and we
were going nowhere fast. Then I found out more about the high level of large Brokerages and
Institutions accumulation and decided to take the only remaining course of action: calling the
CERTIFICATES in order to kill the PHANTOM NAKED SHORT overhanging position.
This has worked well for other Bona Fide Companies in the past and is ideal when the
estimated short position is so large that it approaches the overall size of the float itself, since
you then know for sure, there is NO CHANCE the short sellers can cover their overall
positions. I have no doubt that it is in the interest of all these large holders (Brokerage
Houses, etc...) to also call for their CERTIFICATES (discreetly), as they can tell by reading
the Boards and by the share price, that the STRATEGY is WORKING.
However, to succeed, it must be a communal effort, as the more Certificates are called, the
more pressure we apply on the "naked short" position. In any case, to hold your
CERTIFICATES is by far the SAFEST OPTION in such situation.
Regards, F. Goelo + + +
PS: I believe that one of the smaller short selling outfit has already gone belly up and two
more will likely follow suit in Canada... |
