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Microcap & Penny Stocks : DCI Telecommunications - DCTC Today

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To: James Harold Alton who wrote (11589)	11/24/1998 10:17:00 PM
From: JOE MEDSKER	Read Replies (1) of 19331

JHA, I thought I would give you a little more information on this subject. From what I could dig up Mark Valentine is an agent for the three Canadian LP's that do debenture deals with small US companies. He also works for Thompson Kernaghan which is the Canadian firm that does the actual shorting for the partnerships. The shorting is done through CDSE which is the Canadian Depository Securities Exchange. The CDSE simply collects a fee or charges interest for maintaining the short position. The naked shorting is not illegal in Canada so the shorting part is OK under Canadian rules. The illegal part is the connection between the parties who are going to receive the shares through the convertible preferreds and those doing the actual shorting. It is absolutely illegal for the partnerships who purchased the convertible preferreds from DCI to short the stock with the intention of covering the short with the shares coming in from the convertible preferred. I must thank MB on another thread for much of this information. With the help of Mark Valentine and Thompson Kernahgan & Co. the principals of Sovereign Partners and Dominion Capital, IMO, started shorting DCI while the negotiations were going on and continued shorting after the deal was signed. As we got closer to the end of this year they shorted even more because it was in there best interest to have the price as low as possible when they exercised their right to convert the preferred to common. I did notice from the last weeks position report that about 250,000 shares were put into the float from CDSE out of Canada. I expect that figure to be as much or more this week. In other words the shorters are doing everything possible to keep the price down. It is quite evident that the recent run up in the price certainly caught them off guard. Another point and that is the MM PILL. They have worked with Mark Valentine in the past especially when they worked over Restaurant Teams International. I believe PILL started shorting as soon as they became one of our market makers. AS long as we see them playing we should expect the shorting to continue. However, Joe Murphy just made contact with Sovereign and Dominion Capital and informed them he was exercising his right of buying back the F-series. The increasing number of shares that are short are like a rubber band. The further you pull it down the further it will go up when it is released. Next week will be an extremely interesting one for all of us as the company will be out of the QP and attacking on all fronts. I will expound on this in another post as this one is long enough. Best Regards

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