Problem with longs have been selling theory
Periodically someone raises the theory that the downward pressure on the stock comes from longs who have a low basis in the stock selling. This is unlikely for a couple of reasons. First, I am not saying it is impossible, but applying Occam's razor, it is not the best choice.
If one or two longs selling had been causing all the downward pressure on the stock they would like be insiders or 10% or 5% holders. As such they would have to file form 4's or 13gs. No such forms have been filed. In fact, other than the exercise of warrants by Lacy, there is no evidence whatsoever of sales by insiders or large holders.
The other alternative, that the large sellers are not 5% holders, would require that there are many of them, each holding less than 5% and none of them being insiders. There are not that many non-insiders who hold that much stock and aside from Lacy, none of the warrants or options outstanding have been exercised.
Those of us who have followed the trading of this stock closely have realized that the stock that has been sold has not been sold in a manner that would maximize profit, but a manner that would maximize damage to the stock price. Many sales taken at open in large numbers and using what appeared to be market orders. Other times the sales took place in a walk the stock down manner, again not likely to maximize profit to the seller.
Again, this does not mean it is impossible that the selling is being done by one or more large sellers but it makes it less likely. If one or two sellers they are not only willing to sell and drive the price down but to commit a crime, (not filing) while doing so.
The other alternative, the one I favor, is that the MMs or their partners got in deep naked shorting the stock a couple of years ago. This is not unusual. Most companies on the pinks will need to raise money and the raise will be below market price and itself will likely drive the price down. It's almost a no-brainer for the MMs and shorts. But, PRED was different, they didn't need to raise money. So, the MMs had to keep shorting to keep the price low, otherwise they might be forced to cover.
So, IMHO, the simplest explanation is that the mm's are in deep on the naked shorting and are continuing to short to try to survive. JMO
