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Re: lakemuse post# 907

Tuesday, 04/29/2008 8:22:56 AM

Tuesday, April 29, 2008 8:22:56 AM

Post# of 100336
Lakemuse (& All), let me answer that for you...

Longs are holding their shares because they are very aware of what they have. Let me share some thoughts from speaking with Pinksheets.com to verify how they get their short interest info and from speaking with the BLDV CEO a few days ago.

First though, with the selling, I know of 4 people that sold yesterday all at or above .0035 per share. They were simply locking in on profits. People were flipping BLDV which is why the slight retrace. It was healthy as it created an opportunity for shares to be bought by others at this level which would be in stronger hands from not obtaining profits yet versus those who sold for some profits already. It's all part of normal trading.

From speaking with pinksheets.com, there is a BLDV Share Deficit. There is an “official” shortage of shares that is termed as a FTD--Failure to Deliver. Because BLDV is going to the NASDAQ, a certain accountability of shares has to take place that you won’t see such accountability from your other types of penny stock situations that exist. All “Failure to Delivers” has to be covered. For inquiring minds, a “Failure to Deliver” position is a “Naked Short” position. See the important video below by the good Senator to really understand what a FTD is:
http://investorshub.advfn.com/boards/read_msg.asp?message_id=26915712

I did not buy BLDV because of it being an “official” naked short play or short squeeze play, but because of it existing, I guess a covering would just be some extra gravy to go on top of our meal.

Keep in mind, the inventory of shares is zero as it is already a negative number so as long as we continue to close green, then it is very evident and apparent that the deficit continues to grow to increase that negative number. Every time the MMs go to the BLDV inventory of shares to fill a buy order, there are no shares there to fill that order so they do so electronically by borrowing or creating phantom shares to place in our account which really acts as a marker for informing them what needs to be come back to for covering at some point in time. The larger the deficit grows, the greater the covering will be before our shares are collected up to be swapped out for shares in that NASDAQ stock. A deficit can’t exist when this happens or the regulatory bodies will hit the ceiling behind the scenes from the official readings that are now sent out and tracked daily.

From calling and speaking to pinksheets.com, there are FTDs with BLDV. I was specifically told this by pinksheets.com. These naked short positions are identified “officially” from all buying and selling transactions and information that is interfaced between the Market Makers (MMs), the brokerage Companies, and the Depository Trust Company (DTC). Then the MMs send a data feed to FINRA twice a month at the end and mid-month time frames. Then pinksheets.com gets a data feed from FINRA informing them of the amount of shares that were failed to be delivered.

About FINRA:
http://www.finra.org/AboutFINRA/CorporateInformation/index.htm

So the beauty of this is that whenever a FTD exists, it means that the Float must have been gone for the MMs to be trying to create an orderly market by allowing the shortage of shares to continue growing. This means that the Float number is not really important. What is important though to know about that Float number is that no matter what that number is, it is all gone. There are no more shares available for the public to buy. It doesn’t matter whether it is 29 Shares or 29,000,000 Shares. What matters is that the MMs are tapping into a deficit of shares every time someone presses the buy button to further increase that deficit. Understand that this is “not necessarily” the fault of the MMs as they are simply doing their best in trying to create an orderly market given the inventory of shares dilemma that exists.

The MMs are doing this from an already “ZERO” inventory of “legit” shares existing. The problem with this is that as more and more volume enters into the picture, the more the MMs continue to try to create and maintain an orderly market by filling those buy orders therefore creating an even greater deficit of the phantom shares that are in need for being covered. The problem compounds when a reason exists for a covering to be in need of taking place ie like going to the NASDAQ by reverse merging into that NASDAQ entity. If no reason ever existed for them to cover, then they wouldn’t as they would just continue increasing the deficit by doing their job to create and maintain an orderly market. However, with BLDV, we have a huge reason for them to cover since those shares can’t be left accounted for since going to an entirely different market.

Now let’s further observe BLDV’s situation. The CEO told me that he is not dumping shares. I believe him because from speaking to him, the audit for everything is already done. Once the due diligence process has been completed at this level, the share structure can’t be tampered with because the share structure is what is used as the basis for the medium of exchange for accountability of transforming BLDV into the NASDAQ entity through reverse merging into it. Here with BLDV, the due diligence is already done as they are awaiting approval from the SEC. This is why I believe the CEO when he tells me that he hadn’t and won’t be putting any more shares out there.

Now back to this FTD issue we have at hand here with BLDV. Observe below in the chart from pinksheets.com by clicking where it says “Short Interest” in the link below:
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=bldv



You can see that from the last data feed that pinksheets.com had gotten from FINRA as of 14 Apr 08 that there was the BLDV Short Interest of 1,352,198 shares short. Again with this situation, when I say “short” I am referring to a FTD or a naked short position as I had explained above how the info was derived and to be interpreted. The price of BLDV at the close on 14 Apr 08 was .001 per share.

Since we have recently hit .0044 per share with much volume, I would have to say that it is rather easy to guess that there has been more buying volume than selling volume since the indication of the 14 Apr 08 FTD position where the inventory of shares was already zero. As of 14 Apr 08, there was a deficit of shares needing to be covered in the amount of 1,352,198 shares. Since there has been an increase in buying volume, there has to have logically been in increase in the deficit of shares used to create this orderly market by the MMs. A covering must take place as it will be interesting to see what these upcoming “Short Interest” numbers will report since it has been exponentially growing from the chart I posted above.

The only way to fix this situation is going to be for the MMs to increase the Bid price of BLDV to force us to sell our shares. Selling at these levels is definitely letting them off of the hook. Because of the legitimate things that BLDV has going on in the biodiesel world it might make things more difficult for obtaining that needed selling pressure they are hoping for. Going to the NASDAQ don’t hurt either. They have to either buy the shares out of the open market or hope that enough of us sell to reduce the blow for them covering.

As I stated before, I did not buy BLDV because of the potential it has from just a covering to take place. I bought BLDV because from doing the math, I see the opportunity to get at least $4.00 for every penny or two or less that I will spend now on BLDV. I say this because I did confirm that after the merger, BLDV will meet all of the NASDAQ requirements to include having a $4.00 bid for 30 days. This is the opportunity that true investors will see with BLDV and why BLDV going to the NASDAQ is a completely different type of reverse merger story that is happening here as compared to your average penny stock reverse merger that remains on the pink sheets or in penny stock land. I think it would be wise for people to create a few worse case scenarios in doing the math to see this for them selves. It was actually mind boggling for me.

v/r
Sterling