Meta Materials Inc (MMAT)

[JamesE_]

IDK the specific rule. However, brokers are allowed to sell shares they don't own to create liquidity in the market. They are responsible for locating those shares by the T+2 settlement date; if not, it becomes a fail-to-deliver, or FTD. Some believe brokers play fast and loose here, shifting shares between clients or other brokerages, to clear their FTDs and avoid the threshold list. In other words, they *never* settle these phantom shares. Assuming this occurred with MMTLP, this shell game will soon be coming to an end.

Similarly, for a borrower wanting to short shares into the market, I believe the broker can loan shares they don't own, often from clients' accounts. In the case of MMTLP, if a broker doesn't replace it by the record date, the new owner will receive the Next Bridge dividend and MMTLP will be deleted. Both the short and broker are screwed. It will be impossible to locate shares of Next Bridge, a private company, to place into clients' accounts. Shareholders could wake up on December 14th to find their MMTLP deleted with no Next Bridge dividend... and the crooked brokers will be exposed. They are running scared!