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Biotech / Medical : Gum Tech (GUMM) -- Ignore unavailable to you. Want to Upgrade?

To: Mike M who wrote (123)	3/5/1999 6:51:00 PM
From: DanZ	Read Replies (2) \| Respond to of 133

I recently started using Nasdaq Level II and noticed that GUMM is "restricted". This doesn't show up on Level I but it does show up on Level II. I did some research and discovered that "restricted" means that short sales must be closed out within 10 days after the settlement date. Nasdaq securities are restricted if more than 0.5% of the outstanding shares are sold short and the short position is greater than 10,000 shares. The mandatory close out rule does not apply to "bona fide market making transactions and transactions that result in bona fide fully hedged or bona fide fully arbitraged positions." In addition, short sales that were effected before a security was restricted are exempt from the close out rule. I have a few questions related to this. 1. Does anybody know how long GUMM has been restricted? 2. How many shares were sold short before it was restricted? 3. I'm not aware of any hedging or arbitrage opportunities in GUMM because options, warrants, and convertible securities are not traded on the stock. Therefore, a market maker can only short GUMM as part of a "bona fide market making transaction". What consititutes a "bona fide market making transaction"? I'm trying to figure out if a market maker could hold a short position and continue to short it. 4. Has anybody who shorted GUMM been told about this rule and did you have to close your short position within 10 days after the settlement date? Mad2? Bengalus? Others? I'm trying to figure out the implications of the short position on GUMM. How much of the short position is held by the public and how much of it is held by one or more market makers? If a market maker holds a short position, can that market maker try to pressure the stock by continuing to short it or does the rule protect us from that? Answers to these questions and any other comments about the rule would be greatly appreciated. Here are two links to the rule in the NASD Manual. nasdr.com nasdr.com Thanks, Dan