Pilgrim Petroleum Corp. (PGPM)

[angrypirate]

I won't go into the whole "shorting sub pennies is impossible or extremely cost-prohibitive" routine, but below are my thoughts on why shorting drives down prices in general.

The market is supply and demand...When there are more sellers than buyers, it drives the price down. Now, when you add in people "selling" shares they don't even own, that increases the selling pressure and further drives the price down. Then, when those shorts have to cover, the buying pressure is increased and moves the share price up.

I'm not sure if the uptick/zero tick rule applies to OTC stocks (or if they even get shorted to begin with), but there are systems in place on the big boards to keep shorters from further driving down the price on a stock that is already tanking.