Mullen Automotive Inc (MULN): It is a little bit different in the US…t...

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TenKay

Re: Tom turtles post# 62467

Friday, 08/04/2023 12:30:11 PM

Friday, August 04, 2023 12:30:11 PM

It is a little bit different in the US…they don’t ban it outright under a certain price, they just make it very expensive and risky the lower the stock price.

For example with MULN, if someone shorted 100,000 shares, the most upside they could have right now is capped at about $11,000…and the chances of getting there are remote to non-existent. So in reality the upside is less than that.

On they risk side they would need to put up $250,000 in margin to create that short position.

Who would do that?

Once a stock goes below $2.50 per share your margin requirement exceeds what your short position could EVER pay out.

The US socially tends to want to shy away from legislating against stupidity.

But there is some real economic dissuasion from shorting a $0.10 stock.

1) Do I own stock?
Answer: No. I don’t invest in penny stocks.
2) Why am I here?
Answer: I like debating things that I have a 95% chance of being right about.
3) Am I a paid basher?
Answer: Wait…what? You can get paid for this?