I'm going to make an stab at what happened if Etrade did allow some shares to be sold during lockup...
Etrad makes a market in OTC stocks, a MM. They are always on the FITX/FITXD L2. By allowing you to sell your stocks they essentially bought/took your position from you and it still remains on their books as a sell. They have now created for themselves a short position. I would imagine they also have a long side so they are hedged with probably a larger short side position. Trading right now in FITXD is somewhat artificial as to what the real PPS is because the majority of the float is in limbo. When all of those shares come back on line logically it stands to reason that the price will have a drop. One would assume fairly drastic but who really knows for certain especially in pinky land. I don't know what price these were sold at to create the short but trading has leveled out around this .015 -.016 range. Seems to always spike in the morning. I do believe MM makers shorting an OTC are limited to a certain percentage of what they can hold short. Some previous poster was giving examples of the entire float having to be covered. I think that is way off the mark. They are not crazy as to what they are doing and have a very good strategy. It is their job to make money not be a reckless cowboy. They would lose their job.
Fishing around more as of March 15 there was no retail short position on this stock.
The GNC situation is that they have been given a cusip. This is essentially a label number. From here they now have to get the label in compliance, get the right wordings for the FDA and whatever other agencies need fulfilling, et it in compliance with whatever GNC needs and make sure legally it is all correct. then they can start shipping product assuming that GNC wants to buy it. Don't know why they would go this far if they didn't want it in the stores.
As of Dec 2012 they have between Cenergy products and a recent acquisition (forget what line that was)780,000 in receivables outstanding. That is the most recent numbers I could find in the small amount of time I've given to this search.
If someone was to ask me what to do right now (but please don't ask because I will tell you I don't know). I would say to hold tight and not buy anything because of such uncertainty, JMHO. If you can sell some for a profit why not. If you are just short term trading then that is a different story. When this comes back to normal trading who knows what will happen. I want it to go to the moon. I would even take Mars and maybe see the logo on the side of Curiosity.
I sent an email to FITX with 7 question and received a lengthy response back finally. Some of the answers were a bit sketchy. I want to read it again and will probably respond back with further questions. They apologized for the delay in responding because they said they have received many many inquires regarding the dividend. Not sure anyone cares but I will post it later after I re-read it and respond back to them.
I am just an investor doing everything to protect my investment in an uncertain situation. I still find it odd that a company would just give away shares. This is one of the sketchy answers I want to follow up on.
Again I ramble.
TFLMS
