Actually no they are not, the Broker that has these newly issued shares on deposit isnt the selling source into the market, Scottsdale Capital and Alpine are two such brokers that accept penny stock certificates for deposit, yet VFIN and VNDM are their Market Makers. By regulatory requirements the MM VFIN for example will mark all trades short because they are not physically on deposit with VFIN, as we already know they are on deposit with either Scottsdale or Alpine.
VFIN sells the shares in an open positiona day long to retail and at the end of the day close it out with one Net Trade for all the shares they sold minus their Block Position fee of 1.5% and reports it to the Consolidated Tape.
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