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Microcap & Penny Stocks : VLVT (was CSMA) -- Ignore unavailable to you. Want to Upgrade?

To: TraderGreg who wrote (3842)	12/18/1997 1:14:00 AM
From: VBH	Respond to of 11708

~~would you "DRIVE ALL NITE" to get there?~ To all: 1) Again thanks for indulgin in my humor 2) Any word on any mutual funds hangin around just kinda watchin to see whats happening???

To: TraderGreg who wrote (3842)	12/18/1997 2:31:00 AM
From: george	Read Replies (1) \| Respond to of 11708

Calling for certs is effective against naked shorts - it just takes a while. I have followed RMIL for a long time and have picked up a lot of infor reading the posts there. Here is my view (please correct me if I am wrong): Assume there are 1M shares in the float and that someone has naked shorted 1M more shares to drive the price down. Brokers will not let people short BB stocks. Only MMs and maybe some foreigner interests are able to do this - even though it is illegal. Now let us say that most shareholders call for certs on 1.5M shares. The normal delivery takes 4 - 6 weeks. The first 1 M will get there certs in this time or so (except that the brokers do not really want to give out certs and will carelessly or conveniently lose the order but with enough pestering you will get your certs). It is much harder to get certs for the other 500K shares since they do not exist. First the DTC will kick back the order to the brokerage house saying that they need more certs. The brokers will ask the MM that they bought it from for certs. The MMs will not be able to get any though. Now unlike normal shorting, where the borrower needs to cover in 3 days or 6 days with a 3 day extention, the MMs have longer to cover. In fact, the MMs do not really have to cover but after some amount of time (a month was mentioned in one post a long time ago on the RMIL thread) the brokerage house can buy shares on the market to cover and bill the MM that sold the vapor shares. If the seller was a person who had a cert, then the requestor will get his cert. If the seller was a different shareholder with vapor shares, then the demand for certs will 1) go down if he had been requesting certs or 2) the demand will remain the same if he had not demanded certs. Eventually the demand will go to zero because 1) people with certs will sell at some price freeing up certs for others that have demanded but have not gotten their certs and/or 2) people with demanded certs will sell at some price easing the demand for certs. Note that people who have not demanded certs exert no pressure but can benefit from the squeeze and cost shorty a big chunk of dough if their shares are sold. The shorts only need to reduce to 1M the shares for which certs have been demanded in order to end the squeeze. This process takes a lot longer that legal short squeezes. That is why the squeeze at RMIL has not started yet. Also because the MMs can manipulate the price, they can cause uncertainty and shake loose some shares. Without unity of shareholders over this long period of time, the squeeze will not happen. An MM by definition has unity, can plan a strategy to get out of the squeeze cheaply and has time in his favor.