Replies to post #29659 on Carnegie Development Inc. (CDJM)

[Dan Simmons]

Shorting a company that just announced a huge share reduction? Why would anyone do that? Sounds very risky. Is it shorting or is it the 200 Million shares that Kimmons gave out at 0.000 pps being dumped on the market? What could it be?

[DaReal]

have you ever researched what are the requirements for shorting stocks under $2.50?

Here a little write-up:

Brokers require investors to put up collateral to guarantee against potential losses in the form of margin requirements. Often times, brokers will require OTC investors to have $2.50 of margin per share to short a stock under $2.50, which can make shorting penny stocks very costly. For example, if an investor shorted 2,000 shares of a stock at $0.50, you have to have $5,000 in your account. All along, the maximum profit for this position would only be $1,000, if the stock went to zero.

http://theotcinvestor.com/how-to-short-sell-penny-stocks-121/

You can check out Brokers like SureTrader, Interactive Brokers, SpeedTrader and whatever you want they all have similar requirements.

Here SureTrader:

Shorting stocks below $2.50 require a $2.50 per share equity requirement.
For example: If you short 1,000 shares of stock valued at $1.00 per share, you will need at least $2,500 equity in your account.

http://suretrader.com/trading-fees/margin-fees/

With these costs and Terms in mind you'd need a massive Account in order to short a sub-penny and actually make some $!
In order to short 1M shares here you'd need to have at least $2.5M Equity in your Account.