Well the simplest way to put it is this:
* There are only X number of shares available for any given stock.
* Not all brokerages will always have their own internal supply of a particular stock...especially stocks with low liquidity, which means stocks that are infrequently traded. For example, nearly all brokerages would have their own supply of shares for a company like Apple at any given time, as there is a CONSTANT flow of shares every single day. Therefore, the brokerage likely never has to worry about whether or not they can get their hands on the stock.
* However, with a stock like CRGP, there would be almost no reason at all for a brokerage to maintain their own supply of shares for any length of time. BUT, if a buyer hits the ask, the brokerage is obligated to credit those shares to the customer. If the brokerage has none of their own supply of shares, they will need to acquire them somehow. This situation puts them in a "net short" position, where they will strive to obtain those shares at a cheaper price than they sold them to you for. Let's say you buy 100K of shares at .006, but they end up paying .0055 for those shares to credit to you. They actually make money on the transaction.
* Where things get REALLY dicey for brokerages is when they have clients that buy up large blocks of shares, but the demand for the stock starts to grossly outweigh the available sellers. In this instance, a brokerage will likely have to pay a massive premium for the shares in order to credit them to you and clear their books.
* In the case of CRGP, we have a stock that appears to have a dwindling supply of available shares, suggesting that buyers are holding the shares they have bought and are waiting for higher prices. We also have a stock that is not in compliance with the rules, but potentially could be at any time in the next 6 weeks. This situation would make brokerages quite nervous, which is why they are restricting buying. They are scared that they will lose a lot of money because they will have to acquire shares at a substantially higher price than they sold them for.
* When brokers allow selling, but no buying, they are not just accepting your order out of the goodness of their hearts and duty to transact. They are allowing you to sell because it allows them to clear their books AND build a long position of their own, as they will now have their own supply of shares, which they fully intend to sell back into the market at a profit. Remember, they know more than you.
Look at the GME and AMC fiasco. Robinhood restricted buying, but permitted selling, which resulted in a massive price waterfall. But then look at the instant rebound the moment buying was allowed again. They literally stole people’s shares and then sold them back at a profit of their own.
This is a borderline short squeeze scenario.
