Joe, it is pretty simple. Yes the short volume is real and not made up.
I am giving a potential scenario that could happen under current regulations. I am in no way suggesting that this is what is happening with SIAF, however it is one of several scenarios.
If you have a large block, let's say 250,000 shares. The stock in question trades on average 150,000 shares a day. If you are lucky enough to have the proper resources, you could have a broker/MM sell short your shares intraday, while boxing the bid up and attempting to cover on the bid.
When you take into account the psychology of the OTC market, you could easily frustrate enough people to cover most of your shorts. If anything, this behavior is almost predictable. If bid support is weak, a MM can easily drive the price down since under current regulation there is no "uptick" rule in place for MM's. They can drive the price down by shorting and thus frustrating people out of the shares they just sold them at a higher price.
This process allows you to maximize your profits. If demand for the stock rises beyond your ability to hold the price down, you simply cover your shorted position with your holdings. Wait for the stock to settle back down to a support level and rinse wash repeat.
Over time however, volume and demand will eventually whittle away at your ability to leverage. On many OTC stocks however, they are simply too thinly traded to ever overcome such actions. Many PIPE financiers use this very tactic to maximize gains.
The short volume is real, it's just not being done in the fashion to which you have probably been accustomed to understanding.
The new rules and changes being made by the SEC will curb some of these abuses, but it won't eliminate them entirely. The approval of the "uptick" rule will at least minimize the "bear raid" abilities of this individuals who use brute force to "shake" or frustrate people out of a stock.
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