Aventura Equities Inc (AVNE): Why a WNSH name, CUSIP#, and ticker chan...

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stervc

Re: stervc post# 7721

Saturday, 07/14/2007 6:00:11 PM

Saturday, July 14, 2007 6:00:11 PM

Why a WNSH name, CUSIP#, and ticker change…

Below is a post I made when I was over in Iraq on 3 Feb 07 about a stock that went from .0001 to .0019 per share. The thoughts from many changed as the potential decreased at such time about that other stock after the increase in price due to the company selling shares into the run. That particular company confirmed what they were doing. However, I think there is a good chance that the logic within the below post will remain in tact here with WNSH due to the issue of WNSH "not" dumping shares unto us and by WNSH "not" increasing the Authorized Shares (AS).

http://investorshub.advfn.com/boards/read_msg.asp?message_id=16749882
Concerning the CUSIP# Change...

I called the CUSIP Service Bureau at 212-438-6565 and spoke to a few people. The last guy I spoke to was a guy by the name of Vinnie. I am trying to get back into the swing of things with investing/trading so please verify anything I post for your own acceptance now and forever. The above phone number I got from the link below:

http://www.cusip.com/

Vinnie informed me that a CUSIP change "usually" comes with a name change, but not always. He stated that a name change will "always" come with a CUSIP# change though. He told me that the “name change” and the “CUSIP# change” starts with the company's Transfer Agent (TA) coordinating electronically with the CUSIP Service Bureau by linking the company’s name and address. Then the CUSIP Service Bureau Coordinates with the Depository Trust Company (DTC).

The DTC will serve as the overseer to coordinate with whomever as deemed necessary. Sometimes the TA will coordinate with the DTC too for certain confirmations or transactions as deemed necessary. The DTC makes sure there is proper share accountability for proper dissemination into our brokerage accounts. This is all done electronically.

After the company/TA receives their new CUSIP# from the CUSIP Service Bureau, the company/TA (& legal team) then coordinates with the NASDAQ and SEC for the already coordinated amount of shares as the new inventory. The company/TA will then coordinate with the DTC to confirm the amount of shares and other key info.

After accountability is confirmed by the DTC, the DTC then authorizes the brokerage companies to change all old CUSIP numbers to the new CUSIP numbers electronically within our brokerage accounts. A CUSIP# change is not enough from what most believe throughout the investing/trading community to force a covering of a naked shorted position in my opinion.

Personally, I think some companies don’t fully understand why it is important to do a “name change” and “CUSIP# change” if you are trying to force a covering of a naked shorted company. A ticker change wouldn’t hurt either although the guy informed me that he is not knowledgeable about ticker changes as that coordination goes through the NASDAQ and SEC with the company’s legal team.

Vinnie, from the CUSIP Service Bureau, explained it to me as when stock 1234 changes its name and CUSP# to stock 5678, the shares of stock 5678 are given to them electronically by the TA to replace stock 1234. This is the key transaction. If only a CUSIP# change transpires then a lesser type of accountability takes place. The name change matching the address of the company is what actually forces an exchange of the "old inventory" of shares to the "new inventory" of shares. Without the name change, there is NOT a “movement of shares” from the TA that takes place.

Only one phase of the accountability process is required to take place to verify accountability when only a CUSIP# change transpires because of the lack of not having a creation of the "new inventory" of shares by the company/TA. Therefore no movement of shares takes place. This is a simple misunderstanding by many companies, but if not considered, it could be the difference for any type of forced covering of any naked shorted positions.

If there is NO DILUTION, a covering of the naked shorted positions should take place due to what's revealed during the accountability process between the DTC after getting the “new inventory” of shares from the CUSIP Service Bureau if there is not only a CUSIP# change, but a name change too.

Because of the CUSIP# change, the MMs will be required to account for each of the old shares with the new shares. Because of the name change, it’s important because it forces the DTC to play a more finite role by not only accounting for the old shares to equal the new shares electronically, but forces them to match a “new inventory” of shares that have been given to them from the CUSIP Service Bureau as the new official/approved inventory by way of the shares given from the company/TA.

Hopefully this information helps investors/traders to have a better understand as to the importance of not just a CUSIP# change, but a name change too.

v/r
Sterling

Sterling's Trading & Investing Strategies:
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