TO: Chevy56,...Effect of a name change
All name changes are Not created equally. If in EAGM's case the new company Cayanne Resources is trading as (T/A) the old company El Alacran Gold Mining (EAGM), there is no effect. If they change the stock symbol to let's say "CAYN" then we force all of the shorts to exchange for new shares in just 2-4 days. At the present, the shorts were given 35 days to cover, due to a change in regulations affecting the NASD brokers. In the regulation the brokers were given 35 days for all shorts to be covered or that brokerage would lose the right to short any stocks. In addition to this rule, was the understanding that future short sales could only be made if the brokerage house had another house with shares in hand that would lend or sell them if necessary to cover. Thereby eliminating what was called "NAKED' shorting, where a person or hedge fund or brokerage could sell enough fanthom shares that did not exist, and could thereby drive the market price down (while getting a good price for the fanthom shares), then turn around and buy-up an equal or better share total while the price was artifically depressed by their previous overselling without holding the shares. They did this, all the time knowing that they had plenty of time to get the shares together should they ever have to deliver, because the SEC had no rules making the practice illegal. In addition to the flight to Gold, this new SEC regulation is making the shorting sellers cover what they sold with shares in hand not ether shares.
When MGMX/BWNR is the company of topic it is a different story. Immediately you had a new name, and a new stock designation and the short sellers were only given a few days to exchange the shares. They had to come up with shares quickly, which is probably why the price went UPWARDS for a short period after the reverse split. The shorters could not buy up mgmx because immediately it stopped trading until you had new shares in your account. Therefore early BWNR shares were sold at a slight premium. Unfortunately, firing the Transfer Agent, prior to the reverse split, merely covered up who those shorting traders were, and allowed this management to add either 50,000,000 shares of MGMX/ or 10,000 shares of BWNR with the hopes that we would not notice. But we noticed. And that's where we are on name changes. Sam.
