I found this on the TPII thread that may possibly explain PDTK's predicament:
This may shed additional light on what we may be facing with TPI's price!
I apologize if this has already been posted. This was taken from Red Hot Stocks
Newsletter!
Matt
PROTECTING YOUR INVESTMENT
-----------------------------------------------
At RedHotStocks, we understand the dynamics of the stock market. However, we
do not appreciate nor do we approve of the practice of undeclared
short-selling. The following is an excerpt from an article from Copley
Pacific on that subject. The author defines short selling, explains the
negative effects, and outlines a program to help eradicate undeclared short
sellers. We at RedHotStocks urge you to read the following and be sure to
demand delivery of your shares.
Understanding Undeclared Short Selling and How It May Be Impacting Your
Company's Stock
Does it sometimes seem that no matter what you do your stock has trouble
climbing in price? If this is the case, your company's stock may be facing
downward pressure as a result of undeclared short selling.
Short selling can be divided into two categories, declared and undeclared. Undeclared
short selling has damaged many dynamic growth companies. Created
by market professionals, the practice consists of creating stock that
doesn't exist. It isn't borrowed but created and it creates enormous
negative pressure on a stock price.
The mechanics of undeclared short selling are as follows:
Nonexistent stock is sold short. This nonexistent stock increases a
company's float. The nonexistent stock makes it difficult for investors to
profit from their risk capital speculations. The short sellers make the
profit. The practice hurts the public companies, themselves. It adds massive
costs to maintaining a market in a stock and it reduces a company's business options.
The basis of declared short selling is borrowed stock. A short seller
provides 50% or more of the value of the stock to his or her broker. This is
done in a margin account. The margin protects the broker against any
increase in the share price. The broker borrows the stock from a depository
trust company. He then sells the stock and adds the money to his client's
margin account. Later, the client buys stock (covers) to replace this
borrowed stock. The difference between the price the client sold the
borrowed stock and the price the client paid to replace the borrowed stock
(covered) is the profit or loss from the transaction.
Most declared short players are institutional money managers and fringe
group market professionals, not small capital public investors who seldom
participate. Declared short positions risk being squeezed. If the company
can double its share price, the short seller will be forced to increase his
margin collateral in order to maintain the short position. At such time, the
short seller may elect to buy (cover) the stock instead of adding to his
margin. This adds to the upward movement of the share price.
Undeclared short sellers don't borrow stock. They don't margin the sale of
their short position. Because they are market insiders they can use various
techniques to sell stock short that doesn't exist.
Is there money to be made by undeclared short sellers? Estimates are that
undeclared short sellers make multi- millions of dollars annually.
Complaints to regulatory agencies haven't stopped the practice of undeclared
short selling. However, one way companies can protect themselves is to
recommend to shareholders that they take physical delivery of their stock
certificates. When physical delivery of stock certificates is demanded by a
significant number of shareholders, the creators of non-existent stock can
be squeezed. The short sellers won't have stock certificates to deliver and
thus they will be forced to go into the open market to buy the stock. This
will cause losses for them and will cause them to move their undeclared
short activities elsewhere.
For other ideas on battling professional short sellers, contact Ray Bary at
the financial public relations firm of Copley- Pacific at (214) 702-7009. |
