Blackout Media Corp (BKMP)

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A "Squeeze" refers to people, generally Market Makers (MMs) who have sold shares to investors that they don't actually have official certificates in their possession at the time of the transaction to make the shares legitimate. This is legal, as long as the broker/MM goes out and buys legit certificates (on the open market) within 3 days to cover the shares he sold.

Example: You buy 1 million shares of BKMP from the MM "SACM" and he sells them to you in good faith, even though he doesn't have official certificates at the time of the transaction. This is allowed by the SEC to create market liquidity. He then has 3 days to get official certificates, from the marketplace, to "cover" those shares he sold to you so it's legit. Quite often, in Pennyland, brokers/MM's never bother to get the legit shares and the "short" position continues to exist and grow. Now just imagine this is done by many brokers over and over again until many millions of shares have been sold to us investors without the legit backing of a legit certificate. This creates a large short position and also dilutes the stock price because it gives the appearance of the company having more shares in the open marketplace than it officially has in its OS (Outstanding Shares). Sometimes the brokers/MMs are forced to cover their short positions by the SEC under the SEC's buy-in rule which forces the brokers/MMs to cover their short positions by buying legit shares from sellers on the open-market. The brokers/MMs are forced to buy at the "Ask", not the "Bid", and this forces the price of the stock to rise rapidly as brokers/MMs scramble over each other to buy legit shares to cover their short positions before the price rises too high.
This money is coming directly out of the brokers/MMs pocket, so they hate doing this, but this creates a "Short Squeeze" or "Squeeze" where the brokers/MMs are being "Squeezed" by the SEC buy-in rule, which runs the price up and investors make good money riding this "Squeeze Play". It's becoming more common as the SEC is actually starting to enforce it's own rules more often these days.

How's that?

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