Naked Shorting-Hedge Fund & Market Maker manipulation? Message Board

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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?

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To: kknightmcc who wrote (3137)	1/16/2008 8:41:17 PM
From: pcyhuang	Read Replies (1) of 5034

The Potential Transformation of NFI Hedge funds may use the technique as described in the NYT article in transforming a company. "The bad news reached Neil Ashe, the chief executive of CNet, as he lounged on the beach in Mexico on vacation with his family over the holidays. The company’s lawyer called to say that two hedge funds had secretly acquired the equivalent of a 21 percent stake in CNet and planned to mount a proxy contest to take over the board. ..." Suppose a hedge fund using $4 million,and through the same route, acquires the equivalent of 21 percent stake in NFI and mounts a proxy contest to take over the board. Assuming the party succeeds, it may first pay off the entire amount owed to the Wachovia Bank. Then the new owner INJECTS a privately-owned business, e.g., a start-up in solar energy, into NFI. With NFI's 8-9 million shares of short positions outstanding, the stock would soar. Novastar Financial (NFI) has been transformed into NSE (New Solar Energy). In short, NFI may just be a cat with nine lives. pcyhuang

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