Alan...the key question here is whether a massive naked short position in a stock can be HIDDEN. We can talk all day about naked shorting in general. I have never, ever said it has never been an issue in the stock market. REGSHO was promulgated to address abusive naked shorting. Stocks get shorted. And there are plenty of examples mostly of exchange traded stocks. Overstock (an oft cited example) was shorted and the use of deep money calls to perpetuate the fails to avoid buy ins was what led to Rule 204. Ironically what happen there could not have happened on a penny stock anyways because there is no options trading on OTC stocks.
But here is the thing...
There is no demonstrated way to HIDE a naked short position on a penny stock. None. If there was we would have seen more than a few examples of such a thing and a huge HIDDEN naked short position being suddenly REVEALED in a penny stock that didn't have any fails or reported short interest.
But that has never ever happened.
It continues to be the pink unicorn many want to believe exists so they don't have to accept the fact their POS stock got diluted to no bid.
The irony with Lumb's stocks and with GNCP in particular is that the dilution is fully and completely disclosed...albeit well after the fact. The "market cap" of GNCP was higher when it hit 0.0001 no bid than it was when it had a 400 million OS. What that means is that the stock pps drop can be FULLY accounted for by the dilution alone. No need to invoke shorty.
But despite the company's disclosures of dilution, the entirely lock step reaction of the pps to that and the complete absence of any evidence of naked shorting...some still want to believe that some HIDDEN naked short position is going to someday save investors from their losses when this mythical accounting of such comes.
Sorry it isn't going to happen.
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