Yeah, I know Rufus had said on 2 of the interviews that the short elimination had already happened. And of course we all know about that non-existent 75 milion shares short. Still want to hear whether any of the insiders were shorting against their restricted shares. There are ways the insiders can legally hedge their positions on restricted shares:
from "restricted securities trading network":
"...Restricted securities – including restricted stock, warrants and debt – are a $1.2 trillion asset class, according to Depository Trust and Clearing Corporation (DTCC).
Despite certain transfer restrictions that apply to restricted securities, there are exemptions that holders may rely on to sell their restricted positions. The Restricted Securities Trading Network (RSTN) was created to facilitate these privately negotiated sales..."
restrictedsecurities[dot]net
----------OR
forbes dec 12 '06 article: [just one quick example]
"...Investors receive restricted shares, typically at a price that is below the current market price of the company. The shares can't be traded until the restriction is lifted, which comes after the issuer has an effective registration statement, a process that takes up to 120 days...investors can hedge their investments by selling short the company's shares in the open market before the registration statement is effective...as the SEC has found increasingly lately, there are plenty of traders who seem willing to ignore those rules. Gryphon sold short shares of the companies in the PIPE deals, only it did so without borrowing them, a practice called naked short-selling, according to the SEC. The trading took place in Canada. Once the registration was effective, the fund used the shares issued to cover its short positions..."
-----------OR
from an article, "Hedging Strategies for Protecting Appreciation in Securities and Portfolios", on a financial planners website:
"...The plaintiff [investor] alleged that the defendant [financial planner] said that hedging the downside risk of the restricted stock was not possible. The plaintiff later learned from another investment firm that hedging the restricted stock was possible and the plaintiff implemented a hedging strategy (using a combination of put options and call options to provide a floor and ceiling value on the stock) with another investment firm..."
------------OR
from "A New Method for Raising Equity" by Austin Murphy, Ph.D.:
"...To reduce this risk to the convertible investor (and to provide the convertible holders with some benefit if the stock price rises), caps have been placed in a majority of the convertible contracts that restrict the flexible conversion price from rising beyond a certain point. With caps in the indenture, the convertible investor can then short the stock immediately upon being issued the convertible without risking unlimited losses to the extent that the stock price rises subsequent to the short sales but prior to conversion..."
===================================
AI
