This is response to signature 707 on the petition,,I do not know the author of this and cannot verify the contents, and the cert pull part I dont know about either.....
1) By the very nature of the business, Market Makers are short on most, if not nearly, all stocks on the OTCBB.
--- Ever wonder what happens when a stock that has an average trading volume of 10,000 shares gets hot and trades 1M shares in a day? The MMs don't have that kind of stock in inventory. They just keep filling the orders. The MMs are there to service the retail brokerage industry. The customer at a full service brokerage house does not want to hear, "we can't find the stock for you to buy." No way! The MMs fill ALL orders to keep their big retail brokerage houses happy, because they in turn have to keep you happy. (The world is surrounded with all this fuzzy happiness!) ---- So what happens? --- The MMs keep filling orders, regardless of how "negative" they must go in their own accounts. Do they care? Not really, and there are several reasons for this. The bottom line is this, no matter how bad it gets, they can always "borrow" the stock from the DTC (Depository Trust Company) Who and what is the DTC?
---"the DTC is a brokerage clearing firm and transfer center. We're a private bank for securities. They handle the book entry transactions for all banks and brokers. Every bank and brokerage firm must secure their membership with them in case they become insolvent, so your assets are secure with DTC". Yes, you read that correctly. The DTC is a private bank that processes every stock and bond (paper securities) for all U.S. banks and brokerage houses. As of April 19, 1999, the DTC itself has stated that their assets total "nearly $19 trillion."
In other words, these guys are to the brokerage industry as what the Federal Reserve is to the banking sector. If a bank needs money they borrow it from the Fed, if an MM needs stock he does not have he can balance his account, with a "loan" from the DTC.
Are the MMs worried about not be able to borrow the stock from the DTC? NO! Why? Look at this statistic ---"the Depository Trust Company absolutely controls every paper asset transaction in the United States as well as the majority of overseas transactions, and they now physically hold (as of April 1999) 99% of all stock and bond book-entries in street name, not the actual owner's names.
The MMs KNOW they can get stock anytime. How much can the MMS borrow? AHH!!!!!! Here is secret ---They can only borrow as much stock is in the float. In other words, the MMs only need to know how much stock is in the float, and then they can "short" the entire amount. If EVTN has 1.4M in the float, the MMs can borrow 1.4M and the stock will trade as if there is 2.8M shares. The MMs have the ability to double the float.
So let's play make believe. Let us say that EVTN gets back on the OTCBB and puts out some great news. The stock gets hot. And let's assume the MMs short the entire float. What happens next? --- DOUBLE PRINTS on the transaction log! They only fill orders after they buy it from a willing seller with a standing limit order, a new seller enters the market, or they borrow it from another market maker who might have a little "room" left in their account. We have noticed that some people lately have been putting in market orders that sometime take hours to fill. It has happened on several occasions to someone in our group. There are other reasons to cause this too, i.e. illiquidity on the pinks, no orderly market, etc.
(Sorry I couldn't make this short, Multi) Now what? Well EVTN's stock will go up on its own merits even if the MMs are heavily short. If the company is as real as we believe, it will rocket. But can we maybe help it along a little? hmmmm...
Imagine this, the MMs after they are heavily short suddenly find out from the DTC that the amount of EVTN stock they can "borrow" this month is less than they had borrowed last month and now they need to "cover" the difference. All the garbage you read on the threads about a "short squeeze" is mostly a bunch of BS, you can't squeeze the MMs enough, but on a small float stock ---OH YES YOU CAN!
How would this happen? Well, let's say that enough of the longs decide to call in their certificates and take possession of them. Now instead of 1.4M in the float, there is only 1.2M in the float ---what happens? Remember the MMs have the "effective" float at 2.8M (2 X 1.4M), but now they can only short 1.2M, or in other words make the effective float 2.4M. YES!!! EVERY SHARE THAT YOU CALL IN FORCES THEM TO BUY 2 SHARES!!! Only 200,000 shares were taken in certificate form, but the MMs must now cover 400,000 shares! ---Imagine Multi, the MMs finding out that they need to buy 400,000 shares in the open market! What happens to EVTN's stock price?
Personally, my wish would be for every long term shareholder to call in at least 50% of there EVTN stock in certificate form.
Multi, I have been informed that a supervisor at Ameritrade did make a statement that you can prohibit your stock from being borrowed by putting in a GTC sell order above the current market price. Is this true? I don't know. I also heard that stock in CASH accounts cannot be borrowed, either. My suspicion is that this latter statement in false. The only ABSOLUTELY GUARANTEED method is to call in your stock!
So what does this accomplish?
1) A faster rising share price
2) Hopefully less volatility
but much more importantly....
3) The ability for EVTN to move off the OTCBB because of its increase value of the float ( a major listing requirement)
4) Force the company into making stock splits much sooner to increase liquidity
Sorry for the length and I hope this helps a little. Like I said in the opening, to all readers, this is my opinion which is based on many assumptions, and thus speculation on my part.
How often does the the DTC notify MMs? I don't know this answer. I have been told monthly, three trading days before each month's end. Is this true? I don't know.
If anyone has more concrete information please post it. This is a topic I have long found interesting
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