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Microcap & Penny Stocks : FRANKLIN TELECOM (FTEL)
FTEL 3.550+1.4%Jan 9 9:30 AM EST
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To: Eric Maggard who wrote (12188)6/11/1997 5:38:00 PM
From: M Allen   of 41046
 
Eric,

That is an excellent question. I will try to answer the best that I can.

1. Market makers can sell long or short.

2. At the end of each fiscal month, they have to mark their net position in the stock to market price on their books. That means they have to reflect any paper losses or profits.

3. At month end, the individual traders earn a percentage of any profit earned by the market making firm on the stocks they traded (and yes they have to pay if there are losses), and the firm has to meet various capital requirements.

4. Prior to the S1 being filed, they would have been taking a big risk that the stock would go up and they would have to cover at higher prices and not be able to wait the one year from date of exercising the warrants to cover their shorts.

5. With the S1 filed, the risk was removed.

By the way, I have been very impressed by your web site. One of the best personal sites I have seen.
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