Bob, everything you sqaid I agree with, almost. First of all my post was not a question but a statement. Now let me try to explain what I understand to be the way it works. A normal short will sell a share of stock that he does not currently own, but his intent is to buy a share at a later date and hoping that the stock falls in price, he can buy at a cheaper price than he sold for and pocket the difference. Fine and dandy.
A naked short will sell shares of stock with no intention of ever buying shares in the future to cover the ones he sold. His hope is that by manipulating the stock and its sale price, he can wait until the company goes broke and never have to cover those illegal shares he previously
However, rarely, but sometimes they will naked short a company who fools them and actually becomes a profitable and growing company with a strong future. Now at some point they will have to cover the illegal shares they sold originally. They do not have to buy a legit share to cover a naked short, they only have to buy up shares and return them to their brokerage and tell them to mark those shares off the IOU that was given when they sold the original naked shares. This in effect eliminates that number of shares from the system. If they were air shares then buying them back does not affect the float. The float is based on the legitimate number of shares issued by the company and is the number of shares that are available to be traded in the open market. Air shares do not figure into that number. Since nobody can really claim that their shares are air shares or legit shares, buying up air shares does reflect demand and can increase the share price in the market, so that part of your statement is correct.
What I am saying is that if the company PR's a 500 million share Outstanding, and we know that at least 250 million of that is RME shares and are restricted from trading, and assuming that the other 250 million are owned by management and friends and are logically not being traded, then it is impossible for as much as 500 million shares to be traded in a week unless there is a huge naked short position. If some choose to believe that the company is out and out lying about the 500 million shares Outstanding, then there is nothing I can say to that except, get real.
There is a short position here and it is huge, and while some MM's may be playing the stock for gain (what is happening is far beyond playing the stock, it is clear manipulation for the purpose of gain or for the purpose of cover up), the up and up MM will just do what is needed to maintain liquidity in the stock price.
My opinion, but I think it is the opinion of most here.
AI
