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OOOHHHHHHHHHHHHHHHHH YEAHHHHHHHHHHHHHHHHHHH
Looks like the double bottom was tested and held. Very bullish sign. Plus, the cross candle yesterday is a sign of a bullish reversal. Looks like it's upward and onward from here. This ought to be fun.
Quite frankly, I am so glad that UPDV has been off the radar and there aren't the flippers and bashers all over the place on this board. The good news is, HTOG should take care of that for us once the reporting comes out. UPDV should be able to climb eaily while the majority of the see-saw games gets played out over there.
Forseeing facts? Now that is hilarious. Let's see.... I forsee that I will be a billionaire. You cannot predict the future. But, after reviewing what you gathered for all of us to see, I do think you just might be right about the R/S. I read in one of thoese filings something about one party will have over 3B voting rights starting in the 3rd week of August. That told me there just might be 3B shares soming in play next week. So, just maybe a 300:1 R/S follows. Then, a 300:1 drops the A/S to what? 15M? And the price reopens at $1 which eliminates 2/3 of these debt convertibles value. Nice way to stick the stock holders with a vast majority of Quest debt. Is that the real master plan of Eugene's to get of out BK? Just like that, overnight, drop the debt from $28M to $9M? Then these next couple of months revenue from the coal covers the remaining debt and whammo, 0 debt? If so, then yes, this will be a great buy at that point.
So, Pedro.... is this what you are thinking?
Forget Comcast. Road Winds does it all including.....
TV
----
"Please also be aware, when you use our network, you may also receive our IPTV solution which will allow you a choice of up to 500 channels."
Home phone
----------
"Currently we can offer a total of ten (10) different types of telephones which use our VoIP."
Broadband
---------
"The OneFi broadband solution broadcasts signal for up to 10 miles in WiMax"
http://www.onefitechnology.com/Home_Page.html
OneFi is currently working on projects in South America, the Caribbean, The Middle East and Africa. These projects were selected because infrastructure in many of these areas is either non-existent or legacy. Tomorrow’s bandwidth is delivered today!
More contracts to be announed real soon. WEEEEEEEEEEEEEEEEEE
FEDERAL FUNDING! OMG! FEDERAL FUNDING! OMG! FEDERAL FUNDING! OMG!
OOOOHHHHHHHHHHHHH BABBYYYYYYYYY
UBSS ON BID! OH YEAAHHHHHHHHH BABYYYYY
NO SHARES LEFT! LOL! SQUUUUUUUUUUUUUUUUUUUEEEEEZZZZZZEEEEEEEEE
CA, JAMAICA, TX, NV... Just a start, folks. Those are some big numbers. Looking for some more huge contracts to be announced any day!
GREAT! SBSH on the bid. Now that is STRONG!
.001 BOOM! Here we go!
Anyone that has been here for the last few weeks can tell you this is the pattern. It see saws like good sex then explodes. Get ready as we are about to move up nicely.
EVERYTHING is bigger in TEXAS!
I'm sure there will be some short time flippers. They'll be sorry. Just think this through, people... We HAVE the technology and we ARE landing contracts. There are virtually unlimited opportunities to land contracts because the competition is over 1 year away from even starting to upgrade their systems. And even when they do, it will take a long time to convert their systems over. In the meantime, we will have a majority of the market already. Can you say BYE BYE Clear Channel? Clear Channel is already losing their ass. They'll come crawling to us for a bail out. LOL
Remember, Jamaica is an entire country installation, not a city install.
It's not the same, stoner. This is the new, latest and greatest. You can have all the free old stuff you want as nobody will want it anymore. On 2/17/2009 I'll give you my old TV for free. To think of it, I'll even pay you to take my old wife off of my hands. LOL
Dude, there were 23m buys, 37m sells. It's been that way for about a week. Why? My guess is a lot of people are bailing because things are happening fast enough for them. Just watch them folcking back when the gold rush is on.
Read my past post before you get your undies in a bunch. You see, m_stoner, Clearwire and the rest of the industry ARE moving to this technology. It's not a question of IF. It's all about the infrastruture they will have to upgrade on their current systems that will be their hurdle.
In the case of Road Wings, there is no "ball and chain" so they can go in with this right from the get go. No need to upgrade prior systems, no need to satisfiy an existing old technology, no need to spend tons of money for the cross over conversions, no need to support dual systems, no need to create a new business model.... the list goes on and on.
Now, before you go spouting off and showing us all your ignorance, maybe you should try to look at this with an open mind and gain some education.
So, where is the competition? Let's take a looksee....
http://www.wimax.com/commentary/blog/blogViewByAuthor/timsanders
How about behind the curve.
"On an interesting note about Clearwire's plans, the company stated it planned to upgrade most of its pre-WiMAX networks to mobile by the end of 2009---am ambitious goal."
WiMax is gathering a huge head of steam. It will take over the USA. But, first, where is it now?
How about Russia?
http://www.wimax.com/commentary/blog/blog-2008/august/russias-comstar-selects-nortel-to-provide-a-wimax-network-for-moscow
"...already serving several dozen Russian cities with WiMAX services and could reach 100 markets in short order..."
How about Italy?
http://www.wimax.com/commentary/blog/blog-2008/august/wimax-used-to-supply-service-to-italian-ambulance-service
"...may be a first of its kind in terms of a cross-technology roaming capability..."
Good question. The answer is: infrastructure. Read this from Dr. Dobb's. In case anyone doesn't know who Dr. Dobb's is, ask any software developer geek. Dr. Dobb's is a world wide software development (SD) authoritarian.
http://www.ddj.com/164301200;jsessionid=0M4SV2YPUAAFAQSNDLQCKH0CJUNN2JVN?_requestid=423640
In this article:
"By 2010, there will be 12.4 million WiMAX subscribers worldwide..."
"Initially, the technology will find its greatest success in developing countries. However, the technology won't really take off widely until mobile WiMAX is launched..."
I'll cover WiMax in my next post.
It was exactly 1 week ago right about this time of the day when we ran into the close and started the upward leg to .0025 This time, we're going to kiss .0025 good bye and continue our upswing as we have lots of great news on the way including the bonus short covering.
Trade volume is 14m BUYS 11m SELLS. We should break upward sometime as soon as these MMs let off of the breaks.
BLOOMBERG SPECIAL REPORT - PHANTOM SHARES
25 Minutes Video - Watch it
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vIrfhgQPAJ1s.asf
Phantom Shares - Washington Times article:
http://www.rgm.com/articles/WashingtonTimes.html
The Washington Times
Commentary by Jonathan E. Johnson III
November 21, 2007
In the late 1800s, American financier Daniel Drew refined the art of selling counterfeit shares. Drew's biographer wrote, "There is no limit to the amount of blank shares a printing press can turn out. White paper is cheap... printer's ink is also cheap." Today, it is possible to counterfeit shares electronically — and it happens with such frightening regularity and impunity that Drew would be proud.
In modern stock markets, stock ownership has been separated from stock certificates through a process known as "dematerialization." As a result, when investors buy or sell stock, they are actually trading "security entitlements" — not actual stock certificates.
The Securities and Exchange Commission's Division of Market Regulation Director Erik Sirri explains: "The beneficial owner's [i.e., the investor's] ownership cannot be tracked to a specific share... [T]hey own a bundle of rights defined by federal and state law and by their contract with the broker. ... That's news to a lot of people." News indeed.
Brokers in U.S. equity markets receive commissions when buyers pay for shares, not when sellers deliver those shares. Thus, incentives to deliver share are so weakened that some brokers and large institutional customers (e.g., hedge funds) regularly use loopholes to avoid delivering shares at all. The result is a "failure-to-deliver" (FTD).
FTDs can be caused in several ways, but they commonly result from short sales in which the seller does not borrow or even locate the stock he sells (the infamous "naked" short sales). Regardless of how an FTD occurs, for each share not delivered the system creates a "phantom" entitlement the market treats as a real share. These "phantom shares" are supposed to be temporary in duration and few in number. Loopholes, however, are exploited on such a scale, and phantom shares are so persistent, they are corrupting the U.S. equity markets in three ways.
(1) Phantom shares warp corporate governance by inflating the number of voting shares. Bob Drummond (Bloomberg Markets) reported in April 2006, "The results of high-stakes company decisions may hinge on the invisible influence of millions of votes [i.e., phantom shares] that shouldn't be counted." In an analysis of 341 corporate votes in 2005 by the Securities Transfer Association, there was evidence of overvoting in all 341 cases.
(2) Phantom shares distort share prices by flooding the market with excess supply. In July 2006, SEC Chairman Christopher Cox said "abusive naked short sales ... can be used as a tool to drive down a company's stock price to the detriment of all of its investors." The creation and sale of phantom shares has become a common means to manipulate share prices in U.S. equity markets.
(3) Phantom shares create systemic risk. According to the Depository Trust and Clearing Corp. (DTCC), on any given day "fails to deliver and receive amount to about $6 billion daily ... or about 1½ percent of the dollar volume." Bradley Abelow, a former DTCC director, says FTDs within the settlement system "occur as a matter of course with great regularity," and calls them "endemic." The stock market has turned into a game of "musical chairs" where claims of ownership exceed shares issued. What happens when the music stops?
In a weak attempt to curb abusive naked short selling and reduce outstanding FTDs, the SEC implemented Regulation SHO in January 2005. Regulation SHO requires the stock exchanges to publish daily a list of "threshold securities" — companies that through no fault of their own have FTDs in excess of 0.5 percent of their outstanding shares. More than 6,000 companies have appeared on these Threshold Lists — many for hundreds of consecutive trading days. For these companies, Regulation SHO does not work.
Freedom of Information Act (FOIA) data received from the SEC reveal that FTDs have been as high as 10 percent of the average daily trading volume on the New York Stock Exchange and Nasdaq. FOIA data also reveal that, for many companies, FTDs are a significant portion of their total shares outstanding — in at least one case more than 45 percent.
Economists, the U.S. Chamber of Commerce, members of Congress, public companies, and hundreds of informed investors have urged the SEC to adopt a G.O.L.D. standard: G, eliminate Regulation SHO's Grandfather clause; O, eliminate Regulation SHO's Options market maker exception; L, require short-sellers to Locate and borrow shares before selling them; and D, require the exchanges to Disclose fully and promptly the aggregate FTDs for every Threshold List company.
To its credit, the SEC is working to fix two significant loopholes in Regulation SHO by eliminating the grandfather clause (final phase-in on Dec. 3, 2007) and by proposing to eliminate the options market maker exception (proposed, but not yet adopted).
However, these half-measures will not stop the creation of phantom shares. Will the SEC finish the job? That remains to be seen. According to a recent Senate Judiciary Committee report, the SEC is riddled with conflicts of interest that prevent it from properly policing brokers who are guilty of securities crimes. If the SEC does not act to protect investors, it falls to Congress to adopt the G.O.L.D. standard and bring an end to market distortion caused by phantom shares.
Jonathan E. Johnson III is senior vice president of corporate affairs and legal at Overstock.com Inc., a Nasdaq-listed firm on the Regulation SHO Threshold List for 642 consecutive trading days and counting.
Not only that, the size of the blocks was more than most of us would dare going in on. I might be crazy but I know I wouldn't be buying and selling blocks in the $25k range of a subpenny (except for when this baby heads towards $1 <lol>)
You also have to cautious about the Frankfort market. Since germany doesn't regulate NSS, the american MMs can use the german MMs to cover their tracks on the NSS. Very dirty play if you ask me.
I think that PR should come out tomorrow at the open. Need to strike when the iron is hot. Plus, doing it sooner builds confidence in the stock and trust in the company. Waiting even 1 day longer is better than nothing but will have less punch. Having it tomorrow will allow us to rally big the entire week and into next week.
Boy, I wish it was that easy. But, the profit does not all go into the value of the stock. In this case, we have years of debt and BK to work through. That should work itself out by the end of the year. THEN, we can look at the numbers and come to this conclusion.
Like I've said, I really like this stock but right now, there are some negatives forces in play. Some of them I think we have no control over and are the hands of people that have some other agenda. The market likes to call this "hostile". I call it something else. Either way, I'm waiting for the dust to clear.
1) These were issued on April 28, 2008 so the market has long ago already had these factored into the price.
2) These are restricted and these would have to be filed before being dumped on the open market.
3) Their par value is at .001
But then, what do I know?
I've been accumulating UPDV for 2 months. Haven't sold one share even during the mini run. I'll be looking to add more this week. At this point, I see no downside at all. UPDV very well could make a nice climb to the dollars, imo.
This just came out minutes ago across my news line.
http://www.ft.com/cms/s/0/d9d64dfc-6700-11dd-808f-0000779fd18c.html
VERT is the Vertical Trading Group. Here's a link of all MMs
http://www.otcbb.com/asp/tradeact_mml.asp?searchfor=NMKT&searchby=i
This is a group of investors that make their own market. Needless to say, this can be either good news or bad news depending on what side they are on.
In this case, the NNS on the STO has been active for about 9 days. This status must be reported after 13 days. But, lots of times, that when the music begins and the MMs just start to swap with either other to show that they are covering when all they are really doing is trading off the short positions.
With that going on, this could go on forever, slowly putting pressure to drive the price down. Eventually, if the stock hits rock bottom, the MMs holding the NNS is the super big winner because when a stock goes to 0, whomever is holding the NSS does not have to report any of their earning on taxes.
So, my concern is for everyone that is watching and hoping for the best here. I am, too. But, if you think the STO listing is something to joke about or ignore, you could be in for a rude awakening.
I'll be back. I'm leary about having broke the bottom resistance. Let's give this a week or two and see what the price does. If it turns out to be a stupid move on my part, so be it. I do believe this is a good investment. But, as we all know, despite that, many better company's have been brought down to their knees and even gone under just by the NSS. Let's keep in mind, I'm sure there's plenty of other people that would love to get their hands on the Quest operation. And no, I'm not talking about a buy out, either, if you know what I mean.
T+3 is Tuesday, I think. If we get PRs with big news on Monday and/or Tuesday, we can kiss this baby good bye all the way to the moon. A cover of 900M shares? I saw everyone one of those trades occur right along side you. Forget small pennies. We could be seeing quarters, half dollars, etc... Come Monday, T minus 1 and counting . . .
Also, I found this great article on the short of Overstock. Long reading but explains everything in detail.
From the Overstock Message Board - 3/13/05
Dear Colleagues,
The issue of 'naked shorting' seems to be becoming a news item, and is even (perhaps) a scandal in the making: I have been called by several publications in the last week to discuss the issue, and there is word of a major expose on a network news program to run soon. This is especially topical, given the issue of Social Security private accounts.
As is known by those who have been regular readers of this board, my involvement with the issue is that of a concerned citizen. However, I figured I would write something here so those who are interested can follow along. Some of this draws together points I have tried to make in earlier threads about 'Wall Street Criminals,' but most of this is new. I have tried to explain here the Failure-to-Deliver and Naked Short issue in plain English. You auction sellers in particular will find many parallels between this issue and the issue of auction fraud, albeit it on a grander scale. In any case, I hope that those who are interested may find this a concise and useful precis on the issue.
1. Shorting Stock: This is a legal and honorable method of investing. Suppose a share of IBM stock is trading at $90, but I expect IBM to go down. I 'short' it. This means that, through my broker, I borrow a share of IBM, sell it in the open market, and collect $90. Assume that IBM then drops from $90 to $50. That is as low as I think it is going to go, so I 'cover' my short: I take $50 of the $90 that I collected, I buy a share out in the market, and return it (through my broker) to the person who loaned me a share in the first place. I am left with $40 profit.
2. Failure-to-Deliver (?FTD?): The American stock market runs on a 'T+3' system. This means that when you sell a share of stock, you have 3 days to deliver that share. If you do not deliver within 3 days, you have, 'failed to deliver,' or 'FTD?ed'. Think of this like someone who posts auctions but does not deliver the goods.
3. DTCC: Depository Trust & Clearing Corporation. This is the back-office of Wall Street. Rather than have people run around with paper stock certificates, the DTCC keeps electronic records of who owns which stock at which brokerages, and settles the trading of stocks. If you 'FTD' ('Fail to Deliver'), the DTCC are the folks whose books don?t match.
4. Strategic Failures to Deliver: Not all FTD?s are necessarily illegal. Someone may forget to get shares of stock out of her sock draw and deliver them to her broker within three days of a sale, yet this does not make her a criminal. Also, in the center of Wall Street there exists a job known as a 'market maker,' someone who is charged with maintaining an orderly market in a stock by continuously buying and selling to create liquidity. Market makers are allowed (on a good faith basis) to buy and sell stock that does not exist, temporarily, just to keep liquidity in a stock. Again, this is expected and allowed. What is not allowed, however, is for investors to sell and fail-to-deliver purposefully: doing so (through a variety of mechanisms that I will explain below) in an attempt to manipulate the price of a stock, is a 'strategic' failure-to-deliver. Some folks believe that Strategic FTD?s played a role in the 1929 meltdown. In any case, there have been regulations against it since 1933 (regulations which provide for criminal and civil penalties). The slang term for 'Strategic Failure to Deliver' is, 'naked shorting.'
5. The Economics of Naked Shorting: The gist of naked shorting is simply, when a hedge fund pretends to short a stock (I say, 'pretends' because it is stock that it does not really own, and which it does not really borrow). It sells those made-up shares into the marketplace, and collects the money just as though it sold real shares (note that this is 'counterfeiting,' more or less, though with electrons rather than paper). If it is stock in a small company, and does not trade with much liquidity, then the hedge fund can keep 'selling' its made-up shares and drive the stock price down to wherever it wants it to go.
In a healthy market, the check-and-balance on shorting would simply be the number of shares that are available for short sellers to borrow and sell. Since there would only be a finite number of shares to borrow and sell, there would be only a finite amount of pressure the shorts could bring upon a stock (and it would be offset by buying pressure holding that stock up). But if naked shorting is allowed, then there is no limit on how many bogus shares hedge funds can create. Thus means they can drive a stock?s price down close to $0. At the very least, this practice destroys peoples? savings (remember, the shorts make money by driving the stock down, whereas any stockholders lose that same amount of money as the stock price drops). Some folks believe companies have been driven out of business by this, because they cannot raise new capital once those stocks have cratered badly enough.
The key is this: if given the right to create an unlimited number of new shares, essentially out of thin air, not limited by the number of shares 'in the borrow' as legal shorting requires, these hedge funds can always drive the price down and always cover for a profit. That is why it?s, 'illegal.'
6. How can Naked Shorting Occur in Our Regulated Markets?
_____a. The lazy explanation: How can a hedge fund get away with selling shares it neither owns nor borrows? One theory is that the DTCC (and some brokers) look the other way for 'favored' clients. 'Sell 100,000 shares of XYZ for me.' 'Do you have the shares?' 'Oh, you know I?m good for it!' Large clients enjoy such favored relationships and, because they have deep pockets, the DTCC and the brokers assume they can trust those clients to operate like this and true things up later. This lackadaisical attitude, however, gives dishonest hedge funds opportunity to 'sell' stock that does not exist, and thus create downward pricing pressure that becomes self-fulfilling: as the stock gets driven down it reaches the point that other owners lose confidence and dump their stock, and as it gains downward momentum, the naked shorts can cover their shorts and move on.
_____b. The sleazy explanation: Believe it or not, there is a more insidious explanation of how this game works. Imagine that a sleazy hedge fund chooses a small, illiquid company to attack. Often that company is in a poorly understood sector, or is a company with some accounting complexities so it will be possible to create 'where there?s smoke there?s fire' skepticism about its books. Here is what happens:
__________i. The hedge fund gets that US firm listed on foreign exchanges.
__________ii. That hedge fund then 'sells' shares it neither has nor borrows.
__________iii. When the DTCC calls after three days and says, 'Where are those shares?' The hedge fund replies, 'I borrowed them on the German exchange, they will take a few weeks to show up,' or 'I am a market maker for the German Exchanges in that stock, and thus excluded from the no naked shorting rules.'
__________iv. With a nudge and a wink the DTCC says, 'OK, we?ll loan you from our own reserves of that stock.' The DTCC collects a high fee from the hedge fund to do this.
__________v. The hedge fund has relationships with a few compliant reporters, who are called and told, 'Do a hatchet job on Company XYZ.' They do so, perhaps in return for off-shore compensation.
__________vi. The combination of bad publicity coupled with the selling of an unlimited number of shares drives the stock down to the point either that the hedge fund covers and moves on, making a quick $20 - $50 million, or the company goes bankrupt, or simply remains a penny stock (in which case the hedge fund never has to cover its short, and hence, never pays taxes!)
7. The Regulatory Environment: After years of pressure, in 2004 the SEC promulgated Reg SHO (for 'SHORT'), which directs the exchanges (NYSE, NASDAQ, etc.), to start publishing early in 2005 lists of companies whose FTD?s exceed a reasonable amount ('reasonable' = 'greater than .5% of the shares in the company'). This list is called, 'The Reg SHO Threshold List.' It does not list the amounts of FTD?s, just the names of companies that are experiencing them.
The way Reg SHO is supposed to work is as follows. If a company crosses beyond the threshold of a reasonable amount of FTD?s, and then stays there for 5 days without crossing back under the threshold, its name goes on the Reg SHO list. Then, after 13 more days, if it is still on the list, brokers are supposed to tell those hedge funds that are failing to deliver that they must stop failing to deliver, and those brokers are not supposed to take any more short sale orders from those accounts for those stocks.
8. Reg SHO is flimsy: So flimsy, in fact, it set folks scratching their heads - does the SEC not get it? Here is why it is flimsy:
_____a. Telling the hedge funds after 13 days, 'You are not supposed to do any more naked shorting in this stock,' is meaningless - they weren?t supposed to be naked shorting it in the first place.
_____b. There are no sanctions for violators.
_____c. Why grandfather violations that have been illegal for 71 years?
9. Two theories regarding how big a problem this is:
_____a. Tame theory: This is a problem for a small percent of companies, just those that find themselves on the Reg SHO list. Thus this is not a hard problem to fix. But fixing it is going to cause a lot of hedge funds to lose money. They are well-connected with the SEC, and the SEC is co-opted to the point that they are tightening down on this half-heartedly.
_____b. Extreme Theory: This problem is so endemic that if the SEC tried to fix it the system would crack. There are so many losses waiting to be realized by the hedge funds, it would be like the failure of Long Term Capital Management, but on a massive scale (see Roger Lowenstein?s, When Genius Failed, for an excellent explanation of the risk that the failure of even one large hedge fund put on our financial system). In this scenario, the reason the SEC is not being suitably aggressive is because they know the problem has gotten beyond what can be solved without a systemic failure.
10. Which theory is correct? I don?t know. No one knows outside the DTCC, SEC, and maybe the NASDAQ and NYSE. And they are not telling. I have asked the DTCC, SEC, and NASDAQ for the size of Overstock?s FTD, but they all refused to disclose it. This amazes me: if I sold 100 shares out the back door of Overstock without registering them I would go to jail, but (per our inclusion on the SHO Threshold list) some hedge funds have sold hundreds of thousands (or millions) of phantom shares, and the SEC and DTCC protect them. When I ask, 'By appeal to what law or regulation are you refusing to disclose this to me?' they clam up. This is one of the warnings telling me that this may be a problem of catastrophic proportions.
I hesitate to describe the others, as it sounds like I might be lining my hat with tinfoil. But in the interest of completeness, I shall. In 2004 it became public that one well-known short seller, David Rocker (of Rocker Partners), was shorting our company. In October, 2004 I invited him on a conference call to debate me, and it got pretty nasty (see this transcript for details:
Click here for the transcript
Immediately thereafter some knowledgeable-sounding people got in touch and warned me of four things to come, in this order:
_____a) Reporters A, B, C, and D would call and do hatchet jobs on me, as they were lackeys to Rocker;
_____b) I would find Overstock.com listed on innumerable foreign exchange;
_____c) We would find ourselves on the Reg SHO Threshold list when it came out in January.
_____d) The SEC would announce they were starting some inquiry on us.
I already knew Reporters A, B, and C, who had gone far out of their way to write uncharitable articles about me, and while I always wondered at their eagerness to do so, I gave the prediction of more such articles little credit. Yet I had never heard of Predicted Reporter D (Elizabeth MacDonald of Forbes): within two days, she (along with A, B, and C) had called with clear intent to write something unpleasant. Elizabeth hunted for a week, then gave up: we are so squeaky clean, the most such reporters can do is write anodyne trivia: e.g., Herb Greenberg actually once devoted a whole column to how quickly or slowly I returned his calls, and how this could be interpreted as a sign of sinister intent (as opposed to, say, whether or not I was getting on and off planes as I synched my emails).
Then over the autumn of 2004 we found ourselves listed on five exchanges in Germany and one in Australia: someone went to all the trouble to get us listed on these exchanges, though hardly any shares have traded since (this confirms the theory that these foreign exchanges are used simply as smoke screens by hedge funds needing an excuse for the DTCC).
On January 27 we appeared on the Reg SHO Threshold list (only about .4% of companies are on this list).
Thus, these 'crazies' had made four pretty far out predictions. The first three of them have come true. The test of any theory is its ability to make accurate predictions, and the 'crazies' have passed that test. So I started paying a lot more attention to what they had to say.
Incidentally, their fourth prediction (the SEC trying to make trouble for me) has not come true. However, an increasing number of smart people are telling me that, now that I am taking a lead role in this issue, and am the first non-fringe player to do so, the SEC is going to crucify me, for they (according to these sources) are thin-skinned, vindictive, unused to criticism from those whom they regulate, and partly captured by the very hedge funds that benefit from these practices.
11. The 'Pay-No-Attention-To-The-Man-Behind-The-Curtain' Responses: A party line has developed within Wall Street that runs like this:
_____a. 'There is no naked shorting': This used to be the party line, but since 300 companies appeared on Reg SHO since January 2005 it has worn thin.
_____b. 'Reg SHO will address this problem': As only a handful of those 300 firms have dropped from the Threshold List, this is dubious, too.
_____c. 'CEO?s who make an issue of this are just mad that their stock is down.' I have nothing about which to be mad: our stock is 2-3X where it was in early 2004. I am trying to bring attention to this because there is a risk to the public.
_____d. 'The folks who make a big deal about this are crazies who line their hat with tinfoil.' Could be. I know they sound whacko. I know I sound whacko, too. But the test of a theory is its ability to predict, and these 'crazies' make accurate predictions. I have been called by precisely those journalists they predicted would call me. OSTK has appeared on 6 foreign exchanges, none at our own request. On January 27 we appeared on the Reg SHO list (and as we have not come off it since then, I feel the 'crazies' are right about the flimsiness of the Reg SHO mechanism, too). The only thing these 'crazies' have missed so far is that the SEC has not started any vendetta against me (yet) for bringing attention to this issue.
I hope this gives you, dear reader, a broad enough overview of this problem that it may suggest further inquiry. I repeat, I do not know how deep a problem this is. It could be next to nothing, or it could be an Enron waiting to happen (with far greater ramifications, as the failure could be systemic). I don?t know, but I do know that it would be easy for the SEC to clear up the mystery: all they have to do is publish the size of the FTD?s for the companies on the Reg SHO Threshold List.
This is, I think, a fair question for me to ask: after all, if without registering them I sold 100 shares of Overstock out the back door of the firm I would go to jail. Yet per our inclusion on the Reg SHO Threshold list we know that some hedge funds have done that with hundreds of thousands (or millions) of shares: why won't the SEC reveal who, and how many counterfeit shares they 'issued'? The fact that the SEC, the DTCC, and the exchanges refuse to disclose this (though they must have the information every night, else how could the calculate whether or not a company belonged on Reg SHO list?) makes me worried that it might be a bigger problem than they want anyone to know.
On the other hand, if there is really nothing to this issue, then the problem can be cleared up overnight, and myself (and all the other 'crazies') would go away. All we need are the answers to five simple questions, which I write out below in the hopes that some concerned citizens, or an enterprising journalist, can use them to dig a little deeper on her own.
12. Five Questions for the SEC
_____a. Does SEC receive daily data from the DTCC/NSCC on Fail to Delivers?
__________i. If not, why not?
__________ii. How can the SEC regulate without this?
_____b. How large is the fail to deliver problem? Does the SEC even know?
__________i. Why won?t the DTCC tell anyone how large the problem is?
__________ii. Why won?t the DTCC tell the SHO companies how large their FTD problem is?
_____c. How can firms remain on the threshold list if Reg SHO is enforced?
_____d. Why grandfather - pardon - all violations prior to January 7, 2005?
__________i. Wasn?t it against the rules (10(a)2, 15(c)6-1, 17(a)) since 1934?
__________ii. Why won?t the SEC enforce rules on the books for 71 years?
__________iii. What logic supports pardoning flagrant, regular violation of rules?
_____e. Who are the biggest violators of the Failure to Deliver rules?
__________i. Who benefits the most from the past fails being pardoned?
__________ii. Why reward these hedge funds for systematically violating the rules?
_____f. How can private SS accounts be considered while this is going on?
I thank any reader who has stuck with me through this long explanation. I made it as clear and concise as I could, and hope that through these modest efforts some enterprising reader or journalist will have gained the ammunition needed to breech the defenses of Wall Street and get some answers.
And if for my efforts you see me doing the perp walk on TV, remember to send me a cake with a file in it!
Respectfully submitted,
Patrick M. Byrne (Ph.D., Stanford)
CEO, Overstock.com
Would you 2 knock it off. We get it already.
You have some good questions. I also want to add my two cents worth.
First, I want to say I sold out yesterday for about a 30% loss. I'm not happy about that but I weighed the options and saw too many things go unanswered. Did I sell too early? Maybe. But here's what lead me to pull the trigger.
After seeing QMNM announce going into production, I fully expected a release about some $$$ figures talking about the sale of the coal. I'm sure they have buyers as they can't just stock pile coal, can they? Since nothing was released, now going on the second week, something just didn't seem to make a whole lot of sense.
Secondly, the stock broke through the bottom and will have to have some some heavy buying pressure to get back up to .014. I'm sure when they do finally get around to releasing the figures that support the sale of the coal, the stock will rebound. And if that happens sometime soon, it will most likely sit around .014 long enough for me to get my position back.
But, if that takes a while to be released, there is nothing now supporting the current price as the chart shows this could easily drop back down to the low sub penny maybe as quickly as it rose up. If that occurs, then in order for me to average down to a reasonable number would put me in a position to stuff way too eggs in one basket.
Finally, and I don't know if this to be true or not, but the mentioning now of the quarterly is going to be late, I have to question... why? Why in the world would a company that has so much to gain not be on the ball and make sure all of the paperwork is taken care of up front. It seems to me that Eugene would have had the paperwork done well in advance except for the final last figures that could be added right before submittal..
As a final note, with all the negative appearances of those saying the sky is falling, I could care less about these people. If a company is going to make a go at it and be successful, the best way to shut these people up is to show up to the plate and knock out a home run. In this case, Eugene let three meat balls go right down the plate without even swinging.
Looks like another Billion share day. Over 100M in first 30 minutes and darn near all buys.
Gotta strike while the iron it hot.