Disseminated information on PCBM Share count and Float:
This is NOT a solicitation to buy stock or a recommendation of any sort. This discussion addresses a single topic ? shorted shares ? and not rumors of deals, guesses of news, etc. ,etc. I am not a broker or an analyst. I am not even a licensed Professional Engineer (as if that matters). I am simply a large and long shareholder in PCBM who has assembled some information, made some assessments of it, and does not like certain conclusions with regards to the short-sale position in PCBM. If anyone contends any sort of boiler room scheme to manipulate a stock, I can only say I am long term and I am not trying to alter the price ? I am trying to return it to a supply and demand foundation. I will sell some of my shares in the upper 40?s and lower 50?s. Looking over the list and knowing some of the personalities, I might guess a total of 10M shares from the list would sell by 50 cents unless the news that triggers it is worth more.
This is simply a compilation of information from you and other shareholders like you, along with two analyses of the float size. Furthermore I am including an opinion that explains, in part, the long term price fluctuations on the long term. The same information is being sent to all of the respondents with no preferential treatment. Share holding sizes covered the range from a few thousand to >5 million.
a) Virtually every share of stock in virtually every company that is NOT held in certificate form (i.e. is in a brokerage account) physically resides at the Depository Trust Corporation (www.dtc.org). The company has consistently asserted a belief that there was a ?short sale? position in the company based on trade volumes on the DTC summary. Our brokers exchange receipts for deposits at DTC. DTC apparently allows short positions.
b) There have been approximately four price runs from a 10 cent base to a 40-60 cent ceiling in the past 18 months. Over the course of the first two runs (9 months), the float grew from about 12M to about 21M. Since then it has grown to something between 22.5M (my belief) to 26.5M (max I can get).
c) Company says FLOAT is 22.5M but then points out the Form 144e restricted shares of Dennis Gordon. These restricted shares are NOT free trading. They can be shorted against.
The price action can be explained by assuming a nominal price in the mid 20?s with short selling as believed by the company dragging it down to .10. Combinations of Momentum plays, short squeezes and good news have occasionally lifted the shorts and the price, which quickly falls to the .30?s then slowly sags to a dime. Last winter the stock was assumed to be shorted in expectations of delisting. Upon finding it would remain listed, the shorts covered. They are back in spades.
Based on the charts alone, I would not believe the short sale position. In fact, the last time I heard it, I figured it was a sorry excuse for underperformance. However, trading patterns certainly look as though the stock is being held down ? either through additional shorting or through aggressive (nonprofitable) daytrading to squash any rallies.
I do NOT disagree with the present price of the stock. Claiming a stock is WORTH more than it?s trading for is pointless. I happen to think it is, but the point here is not to increase the price of the stock artificially. However, it is very painfully obvious that there is a LARGE short position. First the float analysis.
OldNewsHere?s analysis of the filings on SEC:
On January 1, 1999 PCBM started with 16,494,206 shares and issued 56,935,408 shares of Common Stock between then and March 31, 1999 for $0 to have a total number of shares on March 31, 1999 of 74,429,610. These shares were NOT sold into the float since NO CASH or CASH EQUIVALENT (services, debt relief) was obtained. The company only issued 12,523,076 shares in the following 9 months. The total receipts from sale of stock were $788,073 in that period. Presumably, 5M of these shares were for Dennis Gordon and are supposed to be restricted. It appears that 7.5M shares were sold between April and December of last year, bringing the float to the 21M level that we were told last year.
The company issued 70,309,903 shares in the first quarter of this year, bringing the balance on March 31, 2000 to 157,262,589. They registered 25,382,495 this quarter for future exercise of Dennis Gordon's options and they are all restricted. Read SEC filings and realize that the MAXIMUM float at this point is:
16.5M 1997 and 1998 shares
<7.5M shares sold in 1999 for $788K ?
1.5M shares from the shell merger
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<25.5M shares. (Gordon?s 5M originally included are said to be restricted)
Investor Relations:
IR says the 34M share ?float? includes "at least 7.5M loan collateral that is non-trading". This places an upper ceiling on the float of 26.5M shares, consistent with filings analysis. In August, 1999 we were told the float was 21M shares. Assuming the 1.5M shell merger shares were free-trading and are in the float, the float is at least 22.5M shares and at most 25.5M.
Management says the 22.5 number is reasonable but that there are many more shares than that being traded. I said I could prove it from share count by 10M. Management said DTC trade summaries implied said more than that?
Share count:
I will start by saying that I personally know (via 10 months of e-mail, AOL IM, Yahoo chat, and phone conversations), the holders of >10 MILLION shares. One of them personally knows holders of another 6 MILLION. Of the 21 shareholders with more than 300K, there is only one I am not familiar with. The 116 responding e-mails claim an aggregate of 31.2 Million shares. All claims appear consistent with their posting or with what I recall of them in every case where I recognized the names. There were no big suprises.
The share count as of 9AM Sunday EST was 29.875M. At 4:30 PM it was 31.2M. Rest assured that there are free trading shares NOT included in this count. Aaron Tsai and friends almost surely did not sell the 1.5M from the shell merger for a dime when it had peaked at .48 two weeks prior. There are a few people I know hold large that are not on this list.
The bottom line is I am absolutely sure that the share count of 31.2 MILLION errs to the low side. A share count of 36M is not impossible to accept and the claims that the stock trades as though it has a 45M share float make sense when you realize short shares add to the float. The float is 22.5M. The short position exceeds the number of shares that I expect would sell at .50+/- on moderate news.
Even a large number of daytraders would not effect this, since the shares they would sell are essentially additional short position.
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add 4 million to that today... 36.5M between 125 folks. All the large ones are very well known to me. |
