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To: ztect who wrote (974)	8/14/1998 6:44:00 PM
From: michael john stout	Respond to of 40688

mms can play with your shares however they want unless you take possession of the certificates. This forces them to cover and stop 'naked shorting' the stock.

To: ztect who wrote (974)	8/14/1998 7:24:00 PM
From: Sai P. yandamuri	Read Replies (2) \| Respond to of 40688

ztect, Yes! MMs do short sell more shares to cover the increase in interest from buyers on the belief that interest will subside before their shorts are called. They usually do this on the stocks that they think will further go down. They try not to let momentum players jump into the stock without covering their shorts at much cheaper prices. They can comfortably do this on stocks that they have a pretty good handle. In PNLK's case, MMs shorted this from $8 to all the way to $1, and whenever they see buying interest during this downturn, they will be locking in profits by covering shorts. When the buying interest subsides, they will start shorting again and that's when the price will start going further down. In the current scenario, stock is showing some buying interest at $1 level. Those MMs who made good money on this by shorting are now responsible for NO PRICE MOVEMENT. They are shorting again at these levels to subside buying interest. Their GOAL is to induce selling as much as possible and when the selling dries up, they will cover at cheaper prices. I am believing the MMs who are shorting at $1 level are the ones who already made money on this. MMs can do this as long as they feel comfortable. It is true that they get nervous before any anticipated news releases and that's why stock prices usually go up before earnings announcements(the so called Pre-earnings run up). Once earnings are announced and if they are not higher enough to attract more buyers, they will short the stock again. That's why U see stock prices dropping after the bad earnings announcements. In general stocks tend to go higher. Shorting high profile stocks such as INTC, YHOO, DELL etc. is very dangerous. There were several times shorts got burnt in these issues. But at the same time shorts feel very comfortable shorting low profile companies, companies that are losing money and ofcourse in PNLK's case, companies that are yet to be proven. There are always two sides to the story. Just like how most of this thread members are believing that Phase II will be a success, there are MMs out there who think opposite. They are the ones who are shorting now. They will try and see if there are more investors to sell at $1 level. If they don't see any more sellers, at the same time if they see many buyers, they will start covering. Ofcourse, as Phase II launch date is nearing, the price will start moving up because there are more MMs short covering besides any new buying interest. Once Phase II becomes a HUGE SUCCESS, then it will generate more buyers and shorts will have no other go but to cover their shares. At that time, We will see nice runup in the stock price, depending upon the short position in the stock. But on the other hand, if Phase II is a failure or if there is a further delay, Shorts will be all over on this. I welcome your response/questions on this.