I completely understand there are over 18 million C warrants left. I read that 8K a couple of days ago when I started to look into this and got interested. The discussion here seems to be completely about there a X amount of C warrants left and X amount of E and what may be the end of it all. All of that is known or should be known by everyone. It just keeps getting talked about and is the dominated discussion. I am trying to bring up some other points besides those things. Again, what I find interesting is that as of that 8K there had been a 5 fold increase in shares but yet there are failures to deliver. GBSN is on the threshold list and the circuit breaker list. Why are there fails to deliver here when there should be plenty of shares in the market with the massive dilution that has taken place. Why are sellers unable to deliver shares. They should have plenty to be able to deliver. Regulators have placed GBSN on the threshold list and the circuit breaker list, not me so it isn't my idea.
What I believe is that before Aug 25th when the units were freed up shorts were already shorting this knowing dilution/conversions were coming. On the chart you can see massive selling before the 25th even came. The pps by the 25th had already crashed from 2.50 to the 30 cent area and the units hadn't even been freed up yet. To me is seems that shorts have been selling ahead of conversions. That is how there can be failures to deliver and that is how the massive pps crash happened more so before, not after the units were even freed up. Shorts have been selling before even converting shares. In doing so it drove the pps down harder and faster. It allows them to have made a massive amount on the downside. To lock in the gain though the trade must be completed which means they have to cover. To cover they convert the shares and complete their short sell. When this happens the downward pps movement happens before shares actually hit the market. People think conversions are happening which floods the market with shares and that is causing the pps crash. I think shorts have flooded the market selling before they convert which crashed the pps and then convert to then deliver the shares and close out their transaction. Smart shorts here sold (shorted) at over 2 bucks without having shares in hand but knowing they were going to have those shares. As the conversions happen they then have the shares in hand and use the shares to cover. They made enormous money. On another 8K I even see the company says "technical deficiency". There you have it. The company is saying there is settlement problems at the clearing house, meaning failures to deliver. There are two side to a trade, buy side and sell side. One of the sides is not meeting obligations at the clearing house to settle the trade. What is more likely. That buyers are not delivering cash or is it more likely sellers are not delivering shares.
The whole point at what I am getting at is first shorts played this brilliantly. Second everyone here is saying "18 million more C warrants to convert". Yes that is true but if shorts did what I think they did then I think a big chunk of that 18 million has already been used. If they have sold any of those before hand, before even converting then the negative effect it would have on the pps has already happened. If that happened then when they go to convert the shares they will be used to cover because they have already sold. If that is the case then converting to cover will not negatively affect the pps. The selling effects the pps. The simple act of converting does not hurt the pps. As simply as I can put it is that I believe what happened here was that instead of conversions first and selling second the reverse happened. Selling first and then converting to cover. There must be some sort of hiccup though because now the stock is on two REGsho lists. Maybe they over-extended themselves, who knows. Finally someone might ask why would the company only report there are currently 37 million shares right now if I am saying that a whole lot more of those possible conversion shares have already been sold. The company reports what shares are actually issued. They can not report on shares that have already been sold but not yet converted. This I think is why they said "technical deficiency" because shorts have sold a lot more shares to the market then they have actually converted. If that is true then the summary ends up being that those 18 million warrants are not really 18 million because a big chunk was already sold. They just now have to be converted and then delivered to close out the trade. This is why there is a technical deficiency and failures to deliver because shorts have sold first and converted second. Who knows how far out in front of conversions they are with their selling. Are they 20,40,60,etc million shares sold out in front of the process of converting them. What ever amount it is then that amount is now benign because the destructive part, the selling, already happened.
