Flexpower Inc. (FLXP)

[herbalife13]

Short Selling, Naked Short Selling (NSS):

Short selling is done with actual shares that legally exist in certificate. This practise is usually done when a stock is considered overvalued, and a 'short' expects the pps (price per share) to decline. The short is borrowing someone's shares (possibly even yours) at whatever price, from a broker who has such shares, sells them to the market, and after the price has declined, the shorter buys them back (cover's), pays the broker back, and keeps the excess, as profit.

Naked Short Selling (NSS) is done with shares that do NOT exist, in no form whatsoever, and is done only by Market Makers (MMs). This is very comparable to counterfeiting, except without the need to even have printers. Because naked shorted shares do not exist in any form whatsoever, they cannot even be traced by the SEC. It is also a form of dilution, and in the broadest sense, compounded dilution at it's worst, and furthermore, not even on anyone's books.

Naked short selling was created (by the SEC, no less) to allow MMs to 'maintain an orderly market', though it's intention has been ridiculously abused (by MMs) to the point of criminality. Worse yet, due to 'loopholes' in the laws that MMs are able to circumvent, rarely does prosecution/penalties ever occur.



*Note: This is only a brief outline of NSS, as is much of the rest of the information on this board. Nonetheless, all that is discussed here is to bring general awareness to the 'machinery' of the marketplace.

More on Market Makers: http://www.investorshub.com/boards/read_msg.asp?message_id=15625415