BesaoT35, A negative float is just based on the time of executions and when a transaction goes through. However with GAMESTOP's short squeeze, there was 150% of the float out in trade. The negative float can be seen as when a naked sale happens their may be for instance 150 shares in trade (50 of those shares) being shorted when only 100 shares exist in the true DTC float. It shows as more shares traded but is still a negative float by 50%. It’s sort of the more you see in trade over the float is a negative. Meaning they have to be closed out because they don’t exist. Phantom shares over the float = A negative float.
But let’s not confuse a GAMESTOPS short squeeze or even when others are shorted like Tesla vs. OTC shorted stocks. When an OTC is shorted, most if not all of the ones shorting the stock know full well that soon they will be diluted and the stock will drop. That way they know for a fact they can buy back the higher sold shares for less with out spending a penny.
The OTC is not a risk shorting the stock because everyone is in on the scheme. Many OTCs will make it HTB (Hard to Borrow) but in order for the plan to take place, brokers have to put the shares ETB (easy to borrow) and that window is very narrow.
You have to get in when the schemers and brokers get in before they close out the ETB and make the shares HTB preventing retailers from making the same move as schemers. Plus you cant short the ETB too much or they may close it down. You have to know a planned ETB short sale will generate $10,000,000 to as high as $100,000,000 so you have to just get in with $100,000 more or less so as not to disrupt the scam dilution dump that soon follows.
You need two things, a margin account and information and data.
I knew a money manager who had 250 clients in his firm. He told each of them that he was going to use $1000 from each to buy a new ticker company at $.10 per share (10,000 shares) and to let them know it could move to $10 but as a trusted manager he said the risk is it could drop but what he will do it make sure he gets out of the stock so only 10% may be lost while the gains are worth the risk. Here is what he did.
He took $1000 x 250 clients ($250,000) but he only bought $1000 worth of shares and sent the order confirmation to all 250 so each investor thought they owned $1000 worth. The manager knew it was a pump and dump and when the stock tanked to $.001 his clients were ELATED he got them out at only a loss of 10% so he got back $900 for each client before the stock was worth only $10.
By telling all those 250 people they each lost only $100 was not a big deal (worth the risk) what he did was take the $250,000 ($1000 from each) only bought $1000 that they each thought they owned and then they each though they were out of the stock when he sold them all. He took in $250,000 and returned $225,000 and pocketed the $25,000 in about a week. Once all the investors knew they no longer owned the shares at a $100 loss no one complained or filed with the SEC so the fraud was not exposed. Do that 5 times a year and you make $125,000. Also I know some will do that with profits from performing stock so they can still lose clients $100 a money on the scam stock while they make $300 on the winners.
If 401K managers did not do this and left shares untouched in accounts they make no money so they have to generate a salary so they use good stocks small % to offset the fraud and NO ONE SEES this because no one knows it happened.
That is sort of like a short sale but he fooled the investors to make $25,000. So how do I know this? The ETB data window opened and you jump in then its closed to HRB. The same reason OTC investors don’t know this is the same reason they don’t look at other data before investing and LOOK WHERE WE ARE TODAY!
$100,000,000,000 to as much as $250 billion lost to those investors each year. As investors keep doing what they do so too will the OTC schemes. No regulations, no rules apply to the OTC, not enforcement except for the poor slob CEO patsy to take the fall when the scheme unfolds.
But rarely does anyone get prosecuted simple because investors were told they may not make the company work and you will likely lose all your money in the disclaimer.
