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Microcap & Penny Stocks : Corporate Vision (CVIA)
CVIA 0.4800.0%Jun 30 5:00 PM EST
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To: dexx who wrote (1879)2/12/1998 4:10:00 PM
From: Milk  Read Replies (1) of 6654
 
Shorting Reg. S shares (I don't know if it's taking place):

"The drop in price is generally the result of short selling. Taking short positions in the public float to offset a Regulation 'S' transaction is illegal under US securities laws. However, by definition, Regulation 'S' buyers are outside the US and many are unconcerned with the enforceability of US laws. As such, if the discount is sufficient, they can lock in a profit by shorting the stock and delivering against the short position after 40 days. As long as the short position is sufficiently greater than the purchase price and carrying costs, then the buyer is still richly rewarded and the stock drops considerably in the face of the extra selling pressure due to the short.

While it is illegal for the buyer (or a party related to the buyer) to take short positions in the stock, it is not illegal for other parties who learn of a planned Regulation 'S' transaction to do so (although it is illegal when a new issue is in registration we have submitted written recommendations to the SEC to adopt a similar rule for Regulation 'S'), thus when a company gathers information on Regulation 'S' or interviews two or more distributors (and especially tries to play them off against each other for lower discounts, commissions etc.) it is sowing the seeds for others to take a short position with assurance that cheaper stock might soon be available to cover the short position later on."

offshoreinvestment.com
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