ERHC Energy Inc (ERHE)

[Krombacher]

I've explained this numerous times.

1) when short sellers flood the market with borrowed shares the share price goes down. That's because of supply and demand. Increase the supply with shorted shares and the price goes down.

2) as for demand, very few people follow erhc so closely especially given that the company doesn't report any information for strategic reasons

3) finally, although the future for erhc looks bright... there are never any guarantees for penny stocks.

4) just because a stock trades at a low valuation doesn't mean that the "message of the market" is negative. I already provided a link which shows certain penny stocks go up thousands of percents.

5) finally, the short sellers are actually very useful. They allow long term investors to purchase shares at such a sharp discount that it becomes very easy to accumulate large positions in the company. For example, each of the small group of investors own roughly 10% of the company each. Factor in Offor's percentage ownership and pretty much the entire float is accounted for AND THEN SOME.

No one is selling even if the Kosmos situation falls apart. That's because there are no margin calls issued on long term holders. Only short sellers get margin calls.

The short seller game of attrition was over years ago. Yes we lost a lot of long term holders through attrition and short sellers did very well.

But short sellers also became greedy while a small group of shareholders plus Offor fortified their positions.

Now, short sellers will have their rear ends handed to them.

Krombacher