ERHC Energy Inc (ERHE)

[Krombacher]

I haven't seen your response on this, and it may be because I wasn't very clear:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=164844832

So to be clear...there are clever Canadian short sellers who have realized that when an OTC company stops reporting, the result is suspension, then banishment to the greys, and then revocation, which generally means that the stock price goes to zero. Hence, shorting the stocks when they stop reporting but before they are banished to the greys (where shorting is not allowed), makes a ton of sense. With a 99% accuracy that all such stocks go to zero, shorting such stocks makes a LOT of sense, and shorting the entire number of shares outstanding, if possible, is a no brainer.

To them, this is a simple "cookie cutter" strategy with little risk:

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=164843507

But some of these shorts are actually idiots, because they STILL think that a revocation of ERHC's shares will mean that no regulatory authority can force them to deliver the shares especially since from a tax perspective the shares can be written off as zero. THEY ARE WRONG.

Despite warnings from Day 1, they continue to short ERHC in the false belief that eventually a revocation will happen and that would mean the shares are worthless. Of course, if a buy out happens or dividends happen before revocation, they're going to be in a heap of trouble. But even if revocation is in full force before any of happens...they are STILL in a heap of trouble.

The SEC tells us in their filings that the shares don't disappear at revocation; they are simply not publicly tradable. And because owners of ERHC have a blended assortment of both actual shares and shorted shares, there's no way that certain owners, like Emeka Offor and others, will stand for a failure to deliver by the brokers who lent shares to the shorts. The brokers, the Canadian clearing house and the counterparty brokers will all be on the hook. And they in turn will force ALL shorts to deliver...even the shorts who had nothing to do with this scheme.

No shorting against the box tactics will work. What is shorting against the box?

https://investorshub.advfn.com/boards/read_msg.aspx?message_id=164821132

As clever a tactic that shorting against the box is...it doesn't work here because long term holders now understand what is going on and have galvanized into a small group of investors who refused to sell. The typical "sell off" in companies facing revocation did NOT occur with ERHC, and if anything, an accumulation of shares occurred instead into concentrated hands unwilling to sell.

The above is the reason why such short sellers (and really any short seller) DOES NOT WANT LONGS TO KNOW OF THE EXISTENCE OF SHORT SELLERS!

As we approach a trading ban on Sept 28 for Americans, it's going to be exceedingly difficult for those short sellers, any short sellers, to cover their position. Once they are stuck forever in that position, there is no out to avoiding the eventual buy out and/or dividends, which is sure to occur at some point between now and infinity.

They're royally screwed but too stupid to realize it because they've been lulled into complacency from the success they've had on other stocks with the same issue.

Krombacher