Intelligent Highway Solutions, Inc. (fka IHSI)

[FullDeck]

Volume is all DILUTION from convertible note holders...

...selling to naive "volume/momentum" triggered retail buyers.

An explanation.

First see this... and understand... Friday, 4-6-2018 T-Trades:



These Form T trades were all net trades, i.e., netting out the short sales made by the market maker against a major holder's (convertible note holder's) large block of shares.

TenKay explained the process well here:
https://investorshub.advfn.com/boards/replies.aspx?msg=139234123

T-trades like those are cover transactions being reported to the tape as net trades. What that means is that a large holder had their broker selling ‘against’ a block position all day long...smaller trades that won’t tank the pps. Those trades are all done as “short sales” and then, at the end of the day, the broker covers from their client’s block position. The reason the “cover” hits the tape is because it is done at 98.5% of the pps of the sales during the day. The broker pockets the 1.5% difference as a fee. And since the pps of the second or “offsetting” leg is different than the initial or first legs of the the transactions they have to get reported to the tape as a “net trade”. Normally broker/dealers don’t need to report the second or offsetting leg of a transaction (actually before 1999 the OTC would report both legs of every transaction and thus the volume was always double the actual number of trades).

In the case of the t-trades today just divide the t-trade pps by 0.985 and see what you get. It doesn’t usually come out clean like that pps wise because the sales during the day can be at many different prices...and they use the VWAP to calculate the t-trade price.

Also, those trades also are double counting the volume. If you subtract that type of t-trade volume you can get the open market trades during the day as those t-trades are not open market. That helps to understand just how much % wise those trades represent of the open market volume during the day.

And lastly, the reason those trades are usually dilution is retail rarely uses block position sales to sell...mostly because of the 1.5% fee. Only sophisticated large holders, penny financiers, or those holding significant discounted stock are likely to use that method.

So, yes- there is naked shorting. But it is all being covered by the end-of-day.

No sane trader would hold a naked short position even overnight.

Particularly on a .0001 trading stock.

In essence, you would be betting that the .0001 shares would go down from .0001 while you were short the shares.

The risk would be absurd.

When I first read TenKay's explanation of the Form T trades, I wondered...

Why would the Market Maker short the shares and cover at the EOD (at a small profit, e.g., the approx 2% we see in the above) rather than just sell them outright for a fee?

And the only explanation I can come up with (well, one of several, actually), is that by "naked shorting" a number of shares that is not pre-determined, the MM has the freedom to work the bid/ask using his own discretion rather than need to wait for "sell orders" from the large block holder- the toxic note convertibles.

So the MM can read the tape all day, and decide what the appropriate number of shares is to put out on the "ask" without needing a sell order from the large holder.

Then, at the end-or-day, he executes the Form T transaction to cover those "naked" short sales by buying them from the block holder (the toxic note converter), and skims his fee via the lower cost.

In today's case, a 2% fee. Sells short at .0001 and covers at .000098.

Maybe TenKay can chime in on this. I certainly can't KNOW all the shady backroom mechanisms used in pinkyland.

But one thing is certain.

These shares represent dilution that is going straight into the Outstanding Shares.

And this should be shown on the next OTCM EOM profile update, should IHSI choose to provide it.

We've seen this before:
"They've renegotiated nothing. Nothing. Really sinful. Really sinful, Devon"
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=139333732

And:
"Raising the OS 20% impacts us all."
https://investorshub.advfn.com/boards/read_msg.aspx?message_id=139333751

But the idea that...

When they fear, we are getting closer. Much closer...

...is a good thing for IHSI shareholders is simply wrong.

When major holders are fearful of losing EVEN MORE, and are willing to sell at rock-bottom .0001, they see the writing on the wall.

The inevitable Reverse Split.

All other reasoned thoughts and opinions welcome.

Best to all.