Mike:
I believe that MMs are shorting this as well as many other stocks. I do not believe that it is the fault of CBQ Inc. Here is an E-Mail I just found in My in box. Maybe it will help explain why I feel this way. I am also down a bunch right now with this.
MillenniumPicks.com - millenniumpicks.com
A number of OTC stocks are trading extremely unbalanced. Makes us wonder
just how big some of the MM short positions are. Thanks to Mark H. for
forwarding this article.
Medizone CEO Charges ?Warfare?
By Jack Burney
05/30/2000 07:05 AM CST
Chairman/CEO Edward G. Marshall of Medizone International, Inc., which
claims to have a patented cure for hepatitis C, and has raised the capital
to prove it in extensive testing, charged that a few market makers have
declared war on his stock by shorting at least $2.5-million shares.
?I accept the challenge,? Marshall said in a letter to shareholders. ?To
accept this challenge and face it successfully I will need an Army.
Shareholder's frequently ask, how can we help? Shareholders, this is your
chance.?
Marshall asked shareholders to send registered letters to brokers holding
MZEI stock, asking that the stock be registered in the shareholder?s name,
and forbidding the use of the stock as collateral for short positions.
?It?s not the brokers, and it?s not most market makers ? probably only two
or three,? Marshall told OTC News Network, stressing that he was speaking
as an individual, not as a company official. ?I believe the accumulated
short position in this stock is so large now that it will prove to be a
financial catastrophe for a certain group of market makers -- certainly
not all -- to allow this stock to reach its fair market value.?
The war will start in earnest at 10:00 am, Wednesday, when Medizone
stockholders hold their annual meeting at the Spinnaker in Sausaltio, just
across the bridge from San Francisco. Marshall promises presentations
covering research, patent protection, and future cash flow ?that will
leave every shareholder satisfied and confident.?
Last week, Medizone told the world it had received an investment of
$10-million with the promise of $10-million more to finance a massive
random double blind study of its patented ozone therapy, which, it claims,
has totally cured eight hepatitis C victims of the disease. The study will
be conducted in cooperation with Health Canada, whose findings are
accepted by the U.S. Food and Drug Administration through a reciprocal
agreement.
?Combined with the announcement about our scientific progress,? Marshall
told shareholders in the letter, ?which at minimum must be considered
astounding, along with information about the Company's future intentions,
I truly believed Medizone stock would be trading comfortably in the dollar
range by now. I did not recognize that war would be openly declared by
some market makers. I accept the challenge.?
Soon after the announcement, MZEI stock rose 58% to .6800. The next day it
rose to .7350, but then plunged suddenly and inexplicably back to .6100
and then to .5900 where it closed Friday.
The day of the announcement, the stock traded over 3 million shares.
Profit taking, Marshall said, is probably less than 500,000 shares.
?On that day alone,? he said, ?the market makers of this stock increased
their short position by more than 2.5 million shares. The price was not
allowed to rise by the law of supply and demand, the lid was placed on
it.?
The three market makers with the highest volume in MZEI stock in 2000 as
of the end of April are (1) Knight Securities, Inc. with 27.269.042
shares, (2) Fleet Trading, division of Fleet Securities with 17,613,737
shares, and (3) Wien Securities Corp. with 9,716,324 shares, according to
the OTCBB Monthly Share Volume Report. The report does not designate how
many of the shares are bought, sold or held short. The report for May
won?t be out for another week.
The action of some market makers over the last few days is akin to an open
declaration of war,? Marshall said. ?They have put their financial greed
ahead of acknowledgment for the development of a science that will address
a grave world need. They could care less.?
Marshall specifically asked stockholders who have stock in any brokerage
account, to support MZEI stock by sending the broker a registered letter
requesting that ?all stock in your account be registered in your name and
that you specifically do not authorize the brokerage to use your stock as
collateral for short selling.?
That will force the market maker, which has an extreme short position, to
balance those registered, restricted shares with actual stock buys.
The problem arises from the fact that market makers do not have to report
their short positions, as is required for NASDAQ and NYSE stocks, only
their volume. They can secretly hold huge short positions, hoping that the
company will fail and they will rake in all the money, since they won?t
have to buy stock to balance the short position after all.
It presents OTCBB with another obstacle to overcome in its pursuit of new
credibility and investor confidence. A regulation forcing full disclosure
of short positions by market makers would solve the problem instantly.
But, is everyone involved ready to take that big a step just yet? |
