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@236T568 re UPOT PM. Why haven't more people

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TraderGash   Monday, 02/16/15 09:22:39 PM
Re: None
Post # of 177926 
@236T568 re UPOT PM. Why haven't more people shorted this stock?

There are generally two classes of serious OTC short biased traders - long term, who are shorting and willing to wait for the eventual decline in PPS, and the short term, who are trying to catch the point at which the stock price cracks for a rapid gain.
Both classes are not interested in shorting at this time because:
- the insiders appear to still hold most of the float. There has not been a lot of volume since trading began compared to the O/S number. Shares sold to bagholders back in the March / April spike may have been bought back by insiders already at much lower prices. When insiders control the float, they can manipulate the price. The price can therefore not suddenly drop, and therefore short biased traders are unwilling to hold a position.
- it costs $2.50 in margin to short a stock under $2.50, so at the current PPS, you are putting up a lot of margin for a position where the price may not move for months.
- there is no obvious catalyst that would cause a drop in pps at this point.
For short biased traders to be interested in UPOT, there would have to be a significant increase in volume and PPS, based on either a promotion campaign or a manipulation which triggers momentum day traders to be interested and help drive the price up.
I haven't looked very hard, but UPOT does not seem to be subject to promotion at this time.
There are a lot of scammy, worthless stocks trading on the OTC that no one is interested in shorting, as a successful short trade needs something to trigger a drop in pps. This could be either insiders dumping, or momentum day traders deciding that the party is over after a big run up, or "investors" who lucked into a big run up deciding to take profits when the price starts weakening. Again, if the insiders hold most of the float, this just isn't going to happen. The exception to this would be an insider whose shares have been restricted and the waiting period is over and who start dumping because they can. Research of the timing of convertable notes and conversion of preferred shares can sometimes indicate that this may be about to happen.
IMO, one of the reasons that MDBX held up for so long was that Vinnie was not greedy, and kept a relatively tight reign on the float.
So thats my 2 cents worth. Any other short biased traders are welcome to pitch in.

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