Thanks. Reason is O/S count does not show
correctly the naked shorts amount @ SMMW until the new regs. were implemented in July. Regardless of potential revenue or even current revenue from a company like SMMW, money is to be made on pps increase on eliminating total O/S, thus forcing naked shorts to cover. If a stock has a large O/S base, and nothing is being done to control it, the naked shorts can play the stock all day long which has been the case with SMMW, and most recently with PAIM. PAIM stayed @ .0001 for 5 weeks until announc of buyback and timing of new regs.
The combination of the new sho reg. in place and PAIM buying back 90% of O/S, forced a chain reaction of naked shorts to cover. The naked shorts had to then try to find shares to give back on what they orig. borrowed, and with now only 10% avail. scrambled and bought all the could to minimize losses. Supply demand rules apply and the pps popped from .0001 to .0009 in days. Yes, it came back down, but not interested in that only the short term upside potential from naked shorts trying to cover their position. Also, SMMW hiring Donnelly Assoc. as new T/A to aggressively go after naked shorts also shows, yes there is much naked short selling with SMMW.
To combat the naked short position and force them to cover, companies like PAIM and now SMMW or buying back significant share count to reduce the float. This creates a pool of available shares that are shrinking. If you have 40B shares avail and 100B naked short shares outstanding, and now the naked shorts have to actually show they own these shares or face fraud charges, guess what happens. Rapid PPS increase.
Now, I believe SMMW has many shares which are naked shorted, which in fact as anyone knows, are really made up shares. As the real float diminishes, and the SHO new regs demand disclosure, the ones who naked shorted have to provide proof they actually own X amt. of shares, or face fraud charges. They will then be forced to buy up as many shares as possible to show these shares exist. But, if as in the case with PAIM, there are less real shares available than the naked shorts have fabricated, naked shorts scramble to buy all the can. This creates the pps increase and fast money for us.
Noone buying pennies should ever look for a long term position with the stock. IN/OUT-Next. Use the leverage created by new regulations on these bastard naked short sellers. It just so happens with SMMW, it is a pinkie company with real revenue, which is an added bonus to real value of the stock price.
GLTY / Not a buy or sell recommendation.
