PKGP (Packaging Plus) Message Board

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Microcap & Penny Stocks : PKGP (Packaging Plus)

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To: blash who wrote (4198)	6/26/1998 12:27:00 AM
From: John S. Baker	Read Replies (2) of 4783

Not sure I really understand your question, but.... Legitimate shorts require the person selling short to borrow the shares ... for real! ... before he can sell them short. Thus the maximum possible short position would be 1x the shares outstanding. in practicality, the maximum is probable some single digit fraction of the float. Naked shorts are where the seller just tells the buyer, "Yeah, I'll provide the shares when the time comes." In essence this is forgery because the naked shorter is creating shares which don't really exist. Since it costs them nothing to create these phantom shares, they can produce as many as they wish ... limited only by their fear of getting caught or squeezed. (Market makers are allowed to go short on a naked basis in order to assure an orderly market.) Remember that nobody can prove whether or not a large naked short position exists in PKGP. One probably should not make long-term investment decisions betting on a short squeeze. It'd be better to draw to an inside straight in Vegas.

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