Been calling around the industry.
The shares are not provided by the company.
The company provides the clearing agent and NASDAQ with
the proper documents concerning the name-change and the
reverse split. After approval by the clearing agent, a
CUSIP number is obtained by the clearing agent. With the
CUSIP number provided by the clearing agent, NASDAQ then
approves the documents and a symbol is issued.
The symbol has been issued, therefore all documentation
is correct.
After the symbol is issued, NASDAQ issues a system notice
declaring the symbol, name-change, and reverse split
effective.
This was done on Oct 31, 2007, with an effective date
for the symbol change from DCUT to SFMI on Nov 1, 2007.
The symbol was active on the open of Nov 1, 2007.
With this notice from NASDAQ, the clearing agent then
notifies the DTC system of the changes and issues the new
shares into the system. It is after this process is done that
the brokerage houses then submit their ledger holdings of
the company's stock ( by their customers ) to the DTC for
exchange of the old DCUT into the new SFMI.
THE COMPANY DOES NOT ISSUE NEW SHARES TO SHAREHOLDERS.
Shareholders who have physical certificates, send those
certificates directly to the clearing agent for reissuance
of the new SFMI certificates. Brokerage firms request new
ledger changes for customers directly from the DTC.
The problem now is with the DTC.
Rumors on the street say that the DTC has an imbalance
of positions. The ledger on the DTC does not agree with
the ledgers submitted by the brokers.
TRANSLATION :
A HUGE IMBALANCE OF SHARES BEING REQUESTED, VS EXISTING.
SOMEONE, or SOMEONES, are very short the old DCUT stock,
and the DTC is having a problem issuing the new SFMI
shares. If the DTC is showing 15 Million shares on the
official books for brokers, but the brokers are requesting
20 Million shares, there is a problem. The system cannot
reconcile the difference. Therefore, the system freezes
until someone figures out what to do.....or someone blinks.
Ask yourself why has SFMI shot up nearly 700 % in the last
4 trading days ? Because there is no stock to buy, and
there is a huge short position. Market-makers, or brokers,
however, are still shorting the stock to meet demand...
again, because there is no stock to find and they assume
that they will be able to cover those shorts in time, at
lower prices.
HOWEVER, the time-bomb is ticking.
Somewhere in here, the shorts will have to cover, so that
the DTC can reconcile their books and issue the SFMI shares to
the brokerages. This includes both the old shorts on DCUT,
and the new shorts on SFMI.
Who blinks first, when, and at what price ?
How HIGH is HIGH ?
This is fun.
