Paychest Inc (PYCT)

[place_your_bets]

Long and Strong! $PYCT cover shorty!

This new rule will be a big move in killing the toxic note industry that has destroyed so many micro cap issues over the past few years. But short-term some micro cap plays could see their stocks rise in what they call short covering rallies.

Some note holder shorted the issues they were funding knowing they could always use the conversions of the notes they hold to cover any short positions on the way down. Now this may only be a small % of funders who did this execution, but if notes are no longer able to be cleared like before these shorters, or market makers, will be required to cover said positions with their own cash now, or risk major losses.

Short-term this is a very positive move for micro cap issues as this may remove extreme selling pressure in some of these issues. For shareholders this is even a bigger win as this will now control the level of sharp dilution growth in any one issue over a set period of time.

Longer-term though this could be a real death nail for some smaller micro cap issues as this will all but dry up emergency funding sources for this sector, and could mean a total revamp of how these small stocks fund themselves.

Stay tuned and register for updates cause this is a developing story!


http://www.wallstreetnewscast.com/microcap-0416/