"So where did all this talk of something so impossible first originate?"
I think the more appropriate question is how does the "hidden NSS" talk continue to propagate?
I don't think there is so much an origin of "something impossible" as much as it is an evolution of misunderstanding and misrepresentation.
The trading processes and procedures, the technology, the law have all changed substantially in the last 10-15 years because of some VERY REAL issues and abuses in the past. And many of those abuses and issues in the past provide an element of believability to the narrative today if you ignore everything that has changed. I could go into a detailed discussion of those changes, but frankly I doubt it would be productive.
But the reality is when an investor has a significant financial interest in a stock and that stock has become a very questionable investment it is only human nature to latch onto anything that creates some element of hope that the investment can be recovered. To quote the Dowager Countess : “Hope is a tease designed to prevent us accepting reality”.
The HIDDEN NSS narrative is a perfect example of this and why it gets propagated in the penny world so ubiquitously. It has a basis in terms of past activity (many many years ago). It is actually a rather complicated issue that contains many elements that make it hard to pin down in a simple way, but naked short selling is a very real process in the trading markets both normal and abusive...yet its basic notion is so simple as to easily allow one to dispense with those pesky (and inconvenient) details when trying to push its existence as some HIDDEN entity on a penny stock.
It absolves the management of the company and the decision making of the investor since it is apparently looked at as an uncontrollable act and the stock, its management and investors are therefore not at fault for poor management, decisions and such. An attractive notion indeed...as opposed to "I just got scammed".
Add on top of that the most misunderstood and misrepresented “data” in the penny world…the FINRA daily short volume report which many look at as evidence of NSS (and nothing could be more wrong and misguided)…and you have a perfect recipe for “talk of something impossible” to carry on…and on…and on.
Reid, or whoever, is tapping into that conspiracy theory, that paranoia…whatever you want to call it with this NOBO discrepancy issue. There may be a share number discrepancy but it sure as heck won’t be some massive hidden naked short.
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