You have to remember that the stocks are typically held in street name, not an individual. When you have a share certificate it is one thing, but in most cases the stock is in DTC form (Depository Trust Company).
Remember also that BB stocks are not borrowed since the MM has no requirement to be able to borrow the stock. One of th ebig problems with the BB, is if a short has enough money he can short it until the cows come home, there is no provision to force his hand. If he's got a big pair and believes in what he is doing then he will keep doing it. If they believe a stock is BS they will continue to pound it knowing what they know. Remember also, you are the public trying to play against professionals. Try to play one-on-one with Michael Jordan and see how far you get. These are pros and do their homework.
Do they band together, absolutely. Would they cut each others throat, absolutely without blinking an eye. But if they are making money they stick together. In this case they have made a lot of money and if the stock pokes its head up again, they will bang it down again. Its an endless cycle.
NASDAQ won't do anything because they detest the BB for probably a hundred reasons. In fact, they get p---d off when people say their company is Nasdaq Bulletin Board, it isn't. It's the Over the Counter (OTC) Bulletin Board, but they have the job of taking care of it.
As far as it being tough to cover on the BB, it depends on the stock. If a float is tight, then the stocks can easily be manipulated. When the float grows the way it has in this case, it is impossible to manage, because it is coming from all over the place. You have thousands of investors owning stock at all different levels, some owned it at pennies and would be foolish to not take some profit and play with the house's money and other have bought it at $8 and say f--k it i will take my lumps. Others say, its cheap I'll buy, others say, I'll average down, there are all different schools of thought
The SEC currently has legislation before it that NASDAQ has spear headed to force all companies to be fully reporting or be demoted to the pink sheets where bascially no one will trade them. This is specifically because of situations like this where the public is in the blind and professionals with the resources to do DD have an unfair leg up.
The legislation is expected to pass soon, which will drive thousands of companies from the BB down to the pinks. That's when the sh-- hits the fan. |
