Spongetech Delivery Systems, Inc. (fka SPNGQ)

[patchman]

The naked short theory is bogus.

1. The short interest levels do not support teh theory.

2. If you assume the shorts all originated offshore thus not part of that report, the new laws would say that those member firms would be in violation of the rules. Member firms must confirm affirmative determination for non-member originated trades.

3. Based on the heavy volume trading, even a naked short would then create a long side failure once the long investor dumps their position. With all teh negative news, I know of tens of millions of shares that were dumped. They would show up as fails if they were originated from a naked short.

4. The fails data shows a pattern where large blocks of shares fail and large blocks of fails settle. This would be the signals of a long fail (cert delay settlement). I have spoke to Mary Schapiro at teh Conference this week and suggested that the SEC relese the FTD data and segregated fails by long and short to better display this situation so that investors will recognize the potentials where 144 stock is being dumped.