Raadr Inc (RDAR)

[LOVE*PINK]

Telvantis should issue Preferred Share Dividend.

Will be nice to email this to CFO Daniel. I did.

A preferred share dividend strategy can potentially put pressure on short sellers—including naked short sellers—to cover their positions, but its effectiveness varies based on the mechanics involved and regulatory compliance.

How the Strategy Works
When a company announces a dividend (especially a non-cash, preferred share dividend), every shareholder of record on a set date is entitled to receive the dividend. Here’s how that can affect short sellers:

1. Dividend Obligations for Short Sellers
Short sellers borrow shares to sell them short. On the record date, since they do not actually own the shares (they’re borrowed), they are responsible for delivering the equivalent dividend to the share lender.

If a special, non-standard dividend (like a new preferred share) is declared, all legitimate shares must receive this dividend.

Anyone caught short (including those with naked short positions) must deliver the dividend, even if they don’t possess the actual shares.

2. Exposing Failures to Deliver ("Naked Shorts")
With a preferred share dividend, every real share will get a preferred share dividend, but synthetically created (naked shorted) shares will cause a mismatch because there are not enough preferred shares to go to all supposed "owners."

The short seller/naked short seller is now "exposed": brokers and clearinghouses must provide the dividend to all parties who think they own the stock, highlighting and sometimes revealing unsettled "phantom" shares.

3. Squeezing Shorts to Cover
To deliver the preferred share dividend, short sellers may be compelled to buy back (“cover”) the shorted shares, driving up demand and potentially the stock price.

If there are many naked shorts (where shares weren’t properly borrowed), this process can reveal failures in settlement—forcing naked shorts to be closed out or bought in by the broker.

4. Market Examples
The most famous example is the Overstock.com (OSTK) 2005 and 2020 digital preferred share dividends. OSTK issued a blockchain-based preferred share dividend, which led to revelations about significant “phantom” (naked short) shares—forcing covering, generating buy-ins and price spikes as short sellers scrambled to comply.

Practical Limitations
The effectiveness of such a dividend strategy depends on strict enforcement by brokers, transfer agents, and clearinghouses.

Sometimes, naked short sellers “fail to deliver” can persist if the market infrastructure is not robust or regulatory enforcement is lax.

Regulatory risk: If the market regulator or depository allows for delays or fails to enforce settlement, the intended squeeze may not materialize fully.

Summary Table
Mechanism How It Affects Shorts
Cash or Preferred Share Dividend Shorts must deliver dividend; can expose naked shorts
Special/Non-standard Dividend More likely to reveal "phantom" shares/fails to deliver
Buy-In/Forced Covering Creates upward price pressure if covering required

In summary:
A preferred share dividend strategy can force short sellers—especially those with naked short positions—to cover their shorts, because they must deliver dividends on shares they don’t truly possess. This can reveal settlement failures, create buying pressure, and sometimes lead to a short squeeze, but its real-world impact depends on execution by brokers, market rules, and regulatory stringency.