Plastic2Oil Inc (PTOI)

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Here is the truth regarding reported daily short interest...


The Daily Short Volume Report

The Daily Short Volume Report is even more popular than the threshold list among short selling conspiracy buffs. FINRA began publishing it at the behest of the SEC in early 2010. At the time, some objections were raised by industry professionals. Jess Haberman, who’d once worked at FINRA, noted that actual short sales are not reported. Rather, “proprietary and market maker sell orders and trades will be marked short when the firm is actually long, not taking into account pending sell orders. At the end of the day, the firm may well end up flat, meaning that they have no position in the instrument. Accordingly, the marking of sell orders as short by market makers, block positioners, and broker dealers effecting riskless principal transactions may not always accurately reflect what has transpired, and publishing data derived from these transactions may not increase market transparency and bolster investor confidence.”

Working together, FINRA and the SEC had created a monster. They had provided companies and their short-obsessed investors with a resource even more seductive than the threshold list. Instead of a mere handful of issues with threshold failures to deliver, the daily short volume offered supposed “short sale” numbers for virtually every stock traded on the national exchanges and over-the-counter. Every day, hundreds of message board posters submit posts about attacks on their stocks by dangerous shorts. Sometimes, they add each day’s numbers to arrive at totals rising as high as trillions of shares. Protests that short interest is a running balance fall on deaf ears.

How Promoters and Issuers Misuse the Threshold List and the Daily Volume List

If a company—a cannabis company or any other penny issuer—is being promoted, the promoters may build much of their campaign on expressions of outrage at the “obvious” short selling driving down stock price. Usually the alleged shorts are mysterious “offshore” entities aided by complicit market makers and message board “bashers,” and their pernicious activities are “proved” by the threshold list, the daily short volume list, or both. Email blasts and “analysts’ reports” promise an imminent short squeeze. A short squeeze is a sharp price increase provoked by the relative unavailability of stock shorts can buy to cover. As stock price rises, shorts may receive buy-in notices from their clearing firms, forcing them to purchase immediately, at ever-increasing prices.

Several promotional sites specialize in “documenting” short positions and predicting short squeezes. One of these is Buyins.net. The site is run by Tom Ronk, who lost his broker’s license many years ago. Ronk charges users of his site $99 a month for unlimited access to all reports. He charges issuers as well: “BUYINS.NET is occasionally compensated a $995 per month data fee by companies covered in our reports or a third party or affiliate of the company. The author of this report, Thomas Ronk and/or his affiliates, do at times have an ownership position in companies mentioned in our reports, and so do members of his family or affiliates and may profit in the event those shares rise in value.” For that price, the issuer will receive “squeeze trigger alerts” and “friction factor alerts” said to be based on proprietary algorithms. The issuers are free to share those alerts with their shareholders; in fact, Ronk will issue press releases about them.

In these cases, what’s really happening is, as with nearly all promotions, that company insiders—dilution funders, S-1 offering selling stockholders, and more—are dumping large positions. Since they obtained the stock they owned cheaply, they don’t necessarily need a higher stock price to profit handsomely. They do need increased volume, which the promotional campaign provides.

Posted on April 13, 2016 by Brenda Hamilton, Securities and Going Public Lawyer

https://www.securitieslawyer101.com/2016/when-shorts-hit-cannabis-stocks/



Re: Publication of Certain Daily and Monthly Short Sale Data on the FINRA Web Site;
File Number SR-FINRA-2009-064
https://www.sec.gov/comments/sr-finra-2009-064/finra2009064-1.pdf