Tim H - I have in no way positively made the claim that naked short selling is at work here; that was just a speculation. I thought that with the shorts having three days to cover to settle their transactions yet with little volume because of the DTC restriction limiting the liquidity that it would be likely that the shorts in trying to cover that time would have to chase the ask up but I it looks like I was just plain wrong and I will admit it. I have been very wrong about many other attributes to this company/stock before but mainly it seems because my assumptions have in the past entailed believing that the CEO was not a crook, the company was not a scam (which I still believe), the product was real (which turned out to be true) and a host of other predictions about pps ranges and fundamental valuations which I have learned are just not actually factors at all in this stock. It is as if the traders in this stock just simply throw valuation and fundamentals over the side and trade the 'action'. The issue is that we were all duped in that the 'action' for over a year probably has consisted of nothing but phony volume and price movements by MM manipulations.
I cannot prove that there exist naked short sales on the MM books because I am not an MM nor am I the SEC or some other agency who would have to officially investigate these huge firms to see if any SEC regs were violated. Other posters have informed us though that there really are no regulations on MMs on naked short selling, they are allowed to do it to 'make the market' liquid. I think though that what happens is that without the constant eye of law always on these MMs they cheat and whenever there is large volume and the price shoots up they make tons of tiny tiny (10K, 5K, 20K,etc) block trades with each other and themselves to overwhelm the buyers once the buy volume starts fading and they ride the drop all the way down into the gutter every single time then simply cover in sub penny land, it must be the easiest game in town for them and no SEC or anyone watching what the &*$! is going down. Also these MMs know that with all the hundreds of millions of shares that traded hands during these speculative price and volume spikes it would be extremely difficult for any agency investigating to try to sift through the every single trade, look up the brokerages/clearing/settlement houses that the trade went through and verify its validity, just too hard.
Any naked short sales or the piling up of them on the MM books over time is only known by them and their internal trading desk(s). It is unfortunate for the little guy investor but without anyone lodging official complaints it will just go on and on I imagine.
All I can say is to suggest doing what I have always done in this and many other plays, accumulate tiny bits by tiny bits over a LONG time anytime the price falls to levels which you personally think are just crazy cheap, then if you keep doing this over time your position 'value' (I dont simply just mean cost basis but instead the underlying real value of that position) WILL grow over time.
No one can give you proof of naked short sales but some here have analyzed the volume and trading metrics, especially for Thur/Fri, and have stated that the volume looked suspicious and that even though we know there were roughly 40M shares shorted, there could have been even more shares short sold that we do not know about. Also supposedely those legit shorts (40M) would have to cover in three days before settlement yet we see this week only so far about 26M volume, which even if it were all covering would not make up even only for the legit shorts. Some would say then well maybe they just all simply covered intraday on Friday, which is fine but I dont think so because if all that 40M shorted then covered on the same day it would have served basically to cancel out the shorts damage done on Friday and so along with no net change from the shorts with the huge buy volume we had on Friday IMO it would have sky rocketed the pps further yet for almost the entire day once we got exactly to .02 we just held there with no more price movement but yet continued buying; something is UP, I cannot prove anything and do not wish to mislead anyone but I smell a rat. Just my own opinions.
Again, the pps for SFIO is just an imaginary speculative price point to suggest future revenue ranges, there is no 'technical reasoning' or other arguments to suggest certain price points other than speculative and general guesstimations as to the fundamental earnings picture for a start up like SFIO. This is another reason why the pps flys around in no mans land, it is totally speculative, maybe it should be 1 cent, maybe it should 10 cents, maybe it should be sub penny! We cannot know because we have no update on the float or O/S and no quarter yet of earnings from the primary product. I think a half a year from now though this will all be ancient history and with decent earnings and paying down liabilities this will trade along with the likes of say a VPC*, etc.
If I were you I would simply hold on to the shares and wait a few months for the dust to settle before making a decision that you could regret later on. If the stock falls at any time to sub penny I would again slowly accumulate more because at the end of the day we do NOT hold some worthless stock like others will have you believe, there is value (read the financial report and take a look at the patent and what historically other companies have paid for patents in the past vs that companies market cap and potential for marketing the patented product).
cheers
GLTY
AI
