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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Larry Brubaker who wrote (14623)	9/16/1999 7:21:00 AM
From: Rich Wolf	Read Replies (2) \| Respond to of 27311

Hi Larry, Would it not be true that if I had two brokerage accounts, and used one to short a certain stock while I used the other to buy shares of the same stock, then the reported short interest would increase if I did not close the short positions? That is all I am saying. Whether it was with the same account or not, or whether it was CC shorting and an agent covering (but not closing), it would give the same effect. If I were CC, and wanted to keep my options open for attempting to drive the price down in June and July, I would have planned ahead and obtained long shares for that purpose. It would be easier, come summer, to drive the price down with long shares than by mere shorting alone (due to restrictions on shorting to an uptick bid only). If POs came early, I could always close the short position with the long shares, so I would be hedged.

To: Larry Brubaker who wrote (14623)	9/16/1999 8:56:00 AM
From: kolo55	Read Replies (1) \| Respond to of 27311

Larry, you must be unfamiliar with shorting. In my account, when I am short shares and buy the same stock, I can choose to either cover my short, or hold the newly acquired shares long. If I cover, the short position drops. If I choose to hold the newly acquired shares long, then the short position remains unchanged. Right now I have two stocks where I have both long and short positions in the same account (VLNC is not one of them). Rich is correct in pointing out this is one way that a hedge fund can push a stock down without waiting for an uptick. If the fund has an inventory of both long and short shares, they can short on upticks, and sell from their long position to the bid on downticks. This is the kind of action we have seen from several MMs. Paul