Ok here is what naked shorting is:
First:
when you or I want to short sell a stock we have to phone up our broker and say I'd like to short sell XXXX stock. The broker then checks to see how many shares are available to be lent out (since you are in fact borrowing shares from another investor to sell) This kind of shorting is healthy for the market.
Second:
Market makers have a different option that we do not have access to. It is called naked shorts.
The market makers are allowed to sell shares that they do not actually have to sell. This enables them to keep an orderly flow of trading. The theory is that they sell you shares that do not exist now, and replace them when someone sells.
If everyone was playing fairly, this wouldn't be a problem.
Sometimes, games are played.
Sometimes a market maker may be naked shorting for a client.
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If you look at the trading volume over the last 3 trading days, approximately 25 million shares were sold. 90% of then were in large block sells.
So what is going on.
Well, it could be that some restricted shares came off restriction, and entered the float, and they are selling now, to get the tax loss, and will buy again in 30 days. The problem with that is that the numbers at the Transfer Agent have not changed as of Friday. Now perhaps their records are not completely up to date
It could also be that there were negotiations with a company that was to get a payment of shares and cash for PanAm acquiring that company. They could have (the new company) hooked up with a market maker, to short the stock in a big way, so that the share price would drop, causing them to get more shares in the transaction.
It is plausible.
Once in a while ofshore brokerages short stock that does not exist, but a two cent stock is not usually what they go after. Way too much risk.
I know that some of the people thought/think it was insiders selling, or a major investment holder dumping.
Trouble is, why would they go through all of that work accumulating for the last 6 months, at prices higher than 2 cents, just to dump at less than 2 cents.
Also, if you look at the trading logs, it is really difficult to envision this slow accumulation.
I do find it odd that ROSY has been yelling that it would hit 1.5 cents very soon, and soon after he is expelled from SI, One particular Market Maker dumps some 25 million shares in 3 days.
If I were paranoid.......
In other news:
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