One Step Ahead

[zeninvestor32]

CAJUN-LA I AGREE

I am trying not to make too much out of it just yet. I admit that there are some compelling reasons to wonder just what the hell is going on since there is NO reason anyone should have ucad shares and NO reason they should be unrestricted and there is NO reason JEFF should just suddenly, after months of compressing the ask, step away from it the day before the distribution. And I admit, I've never seen a pink sheet company give away so many dividends and then suddenly pull back and postpone them. But then again, this is the weirdest stock in the history of the stock market.

On the flip side, i have heard the same thing about some brokers putting shares in accounts early in anticipation of the dividend. However, I have heard that those shares placed in accounts were restricted. Then again, what I have heard has been rumor and perhaps the brokers themselves didn't even know how to handle it. It would be a bizarre situation indeed if brokers around the country mishandled this and placed shares in the accounts prior to distribution that SHOULD be restricted but are not and then their clients actually begin selling them. The brokers would be held liable imo and would have to buy back in for themselves. But I don't know, I've just never seen anything like this. For now, I'm assuming there is some kind of processing mistake going on by brokerage firms that has resulted in this snafu. Most expect a dividend to be distributed when they are told. I'm assuming the worst case scenario (as I believe it is wise to do) and that this will be corrected. If I'm wrong and this is a huge setup for the shorts, then I will be pleasantly surprised. Remember, I guessed a long time ago the short position was 100-200B shares. That is always what I felt was the real number. The difference between the UCAD and CIM distribution was interesting and lead to another theory of there being 800B shares short, but based on the volume traded in the last year, I just don't see how. I have always though 100-200B shares short. That would mean somewhere between 1 and 2 million shares of UCAD would be distributed via naked short shares. And given what we believe the float of UCAD to be (500k-1M), that would be awfully hard to cover. I mentioned this before but KTEL is a company that back in the late 90s, went from $3 to $80 in a few weeks because of a short squeeze that (it is my understanding) resulted from a short position in the neighborhood of 70% of the float. And KTEL actually had NOTHING of value. It was just a pure short squeeze play and the stock landed back down at $3 (by the way, those are pre-split prices if anyone researches it). So no matter what, those shares of UCAD in accounts appear to be illegal shares and are creating a short situation for brokerages. They could not have legally been distributed. The question is do they have to be covered. If so, that will be quite interesting. But I guess, brokers could immediately clamp down on it on Monday and remove them from accounts. Who the hell knows any more. I say just hang on and wait this out. We just don't know enough. So i would says it's best not to assume that this is all intentional and a big setup. There are still many things operationally/procedurally that could have caused this screw-up.

That having been said, I will still make this last comment (because the above isn't confusing enough - LOL). I have pulled roughly 20% of my shares' certs. I can pull no more as the remaining 80% are in my IRA accounts and I will not risk a distribution penalty. Personally, I'm happy holding that percent as a protection in the face of all the uncertainty surrounding this stock. I personally don't believe anyone will ever have an issue with their broker refusing to honor their shares. But then again, I have never seen a stock act this way and have no idea how many brokers may in fact handle this situation. So I took 20% out as a sincere precautionary measure. I don't expect it to matter on that level. But I also felt good about doing it because, while it will not CAUSE a short squeeze imo, if there IS a short squeeze, it will certainly add maximum pain to the situation for shorters. If they are in fact, forced to cover with a buy-in and people already have x amount of certs pulled that will not enter the market again because people stubbornly hold, well then the shorts will have some very serious problems. And as a final note, I pulled my certs because if in fact this stock skyrockets to anything above 50 cents, I will be setting up a trust through which I will deposit these shares so that they can be given away without double taxation (if I were to sell them and then give them away, they would be taxed against my income and then taxed again on the transfer to friends or family). I feel there are many tax advantages to me personally to having my certs in hand in 1M share allotments in the event I want to create a trust and assign my shares over to a trust. This is an area that you should consult an attorney and/or cpa familiar with tax matters on. So for all of the above reasons, I pulled my certs already. Interestingly, it only took 3 weeks via Ameritrade to receive them. So now, IF you buy the theory that the ucad shares were put in accounts that contained naked short cmkx shares, then yes pulling your certs would be a bit more interesting. The cert question is a tough one and I would NEVER trumpet a "pull your certs" campaign as that has never worked and is a poor war cry. But i DO believer there are valid reasons for doing so and IN THE EVENT OF a short squeeze ALREADY happening, I believe any cert pull would only add to the pain.

Sorry for the long-windedness. I don't even know if I made sense. But those are my thoughts, as discombobulated as they are on a saturday morning. LOL