Trying to figure out how do I explain without going ballistic. Here we go.
Any group effort for calling for certificates in order to effect a short-squeeze, doesn't work. RMIL, EUTO, CSMA are three failed examples. There are countless others. I've never seen one work. One of the 10 reasons below will cause it to fail, driving the price down pre-squeeze or as in RMIL halted. MM's/shorts then cover at their leisure.
10 Possible reasons for failing
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#1: Extremely weak fundamantals or non-existant
#2: Too many shares in the float
#3: Being unable to accurately determine what the float is, additional shares entering the float, etc.
#4: Assuming that people report the numbers of shares they own AND inform the counter of updates (buys/sells).
#5: Not everybody calls for their certificate.
#6: Shorters fight back, and successfully due to reason #1.
#7: Attraction of Daytraders
#8: It takes 4-6 weeks to get certificates.
#9: Lots of hype and just hype, no substance. Also, reason #1.
#10: For every move, there is a counter-move by MM's/shorters and/or another rock they can hide other. If just 100 shares is uncertificated it can be made to appear as a 10,000 share sell causing additional panic sells (which means game over)
If the company encourages shareholders to call for certificates in a Press Release, it is most definitly #1. Run (sell), I repeat Run (sell), do not walk away.
People will point out companies like Presstek (PRST) and Iomega (IOM) but there was most definitly not any calling for certificate efforts. It was fundamentals that made the shorters decide it was in their best interests to cover. Whoever would of thought that the Zip-drive would be a success?? Portable hard-disks, yeah like who would want to buy those??
Fundamentals alone will make shorts cover voluntarily (either because they won't be able to sleep at night with a huge loss, or because of a margin call).
If DF-144 works as advertised, this stock will within a year from now be a $15, $25, $40, $50, $75+ stock. If somebody shorted 10,000 shares at $1, they would be looking at a $490,000 dollar loss at $50/share.
The only people that could be short right now are MM's/brokers/big money people, and these people are far too smart to take a half million dollar loss.
Please NO short-squeeze talk about MIDL. I really like this stock, but if somebody attempts to organize a short-squeeze it will force me to re-evaluate everything and possibly sell.
Kurt |
