Naked short on the OTC: If I buy 10,000 shares of FASC at 5 cents from Scottrade and they "get" them from an MM, I show 10,000 shares in my account. If the MM didn't have the shares to begin with, they are "naked shorting" and betting the FASC shares will drop. If FASC drops to 3 cents and I sell, the MM made 2 cents a share without ever having the shares. The MM risk is, the price goes to 7 cents and I sell. It may be sold to a different MM though, and the original MM I bought from had to cover somehow from another seller, I guess. All very confusing.
Cash is King until further notice!!!
My comments on companies are usually my opinion of long term success (years). The PPS may go up or down greatly in the meantime depending on the number of greedy suckers with money.