Destiny Media Tech Inc (DSNY)

[dsny2014]

This is a very important message posted by Van on BIG STOCKS in response to streamingeagle's request. I'm reposting it here for those who hasn't seen it.
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A quick summary:

From the naked shorts point of view, they wait for the company to either go bankrupt or do a financing to cover. They don't want to cover in the market because that pushes the price of their collateral up.

Notice how DSNY hasn't done any financing in years?..in fact they bought back stock (IMO) thinking it would make it even harder for shorts to cover.

A Nasdaq listing would force them to cover and I don't expect DSNY to raise any money until/if they get NASDAQ listing.

Another thing the shorts are concerned about is a $3 share price. At $3, with a Nasdaq listing, DSNY becomes marginable and some people will use margin to buy more Destiny. That's the last thing a short would want to see.

A NASDAQ listing brings in a much bigger and deeper pocket crowd, institutions. So many funds cant touch a OTCBB stock. They (funds) also dont panic when a short flashes a large offer for sale (driving the price down).

[color=red]Bottom line...IMO the naked short IS an institution and they have been able to manipulate the market (flashing big offers etc) because right now the bulk of the shares are owned by retail investors. If DSNY gets NASDAQ listing, institutions come in and the naked short can no longer play his games.
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[/color] The way it works:

- FINRA members have to declare their short positions and they can't naked short. The declared number is the short through FINRA members. (the number that every one sees listed)

- non US brokerages, who aren't members of FINRA don't have to declare short positions. They also "fail to deliver" stock all the time. The US brokerage buys a share, but it isn't delivered within three days.

The US broker has the right to buy-in the seller, but they don't, because they get to keep their own client's money and collect interest on it until the trade completes. The buyer doesn't realize he only has an IOU in the account as the system allows them to sell the IOU as if it is a real share.

These phantom shares create extra supply the holds the share price down below where it normally would be because the implied market cap. is real shares plus phantom shares times the share price.

[color=red][/color] If the phantom shares weren't there, the share price would probably be higher.

It is my opinion that we still have A LOT of phantom shares (fails to deliver) from a decade ago.(read my post about the $35M proposed financing).

The motivation to close these trades and finally buy real shares to deliver is that they have to put up ever increasing levels of collateral as the share price rises. In the short term, it makes sense for them to try to keep a lid on the stock so their collateral doesn't rise, but in the long term, it makes more sense for them to try to cover their position.

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