To: Smithy who wrote (2368 ) 6/5/1999 12:26:00 AM From: Francois Goelo Respond to of 10354
MORE TRUTH EXPOSED ON THE SHORT SELLING/BASHING OF ZSUN... To short legally, it has to take place on an uptick, unless, of course you're a Market Maker. If you're a Market Maker or have an account in Canada, for example, you can do "naked shorts", meaning you don't have to borrow the shares to be able to short. The only problem is that it can be overdone. Take ZSUN with an official float of 2.5 Millions shares, half of it still tightly held, leaving only about 1.25 Million shares to actually "play with". At one stage, the short position was estimated at about 1.6 Million shares, vastly outstripping the potential supply when covering. + Remedy #1: say you're Fahnestock or Fiero Bro. and you want to cover 250,000 "naked short" shares: you go to one of the insiders and offer to buy at a discount to market. The insider, not stupid, says: "buzz off evil shorter!" or: "Vade Retro Satana!", depending on his cultural slant + Remedy #2: The discreet approach failed miserably because the insiders know the business is great. The MM's don't want to alert the pisqueak short sellers, like Evil Puss, Realmonkey or Tradaloo, to avoid a rush to the exits, so they organize an "orderly retreat". + Orderly Retreat: All MM's in the morning decide a trading range for ZSUN, regardless of the buying pressure, say between $7.75 and $7.81. But the Fahns and Fieros don't want the pipsqueak to know they're covering, so they use a technique I call "blind covering": they stay off the bid and let other friendly MM's do the short covering, so the pipsqueaks won't know the difference and cause a rush... + Conclusion: by the end of next week, this little game will be over and barring a major catastrophy ZSUN WILL RISE AGAIN!! Regards, F. Goelo + + +