Replies to post #584 on Telkonet Inc (TKOI)

[SPM555]

The short position isn't naked since TKOI isn't showing up on the RegSho list, but just because they are able to locate the shares doesn't mean they aren't on the hook to buy them back at some point. The question is when and under what conditions do they eventually cover that position, but when someone has nearly 4 million shares to cover, that means eventually they will indeed be buyers of nearly 4 million shares.

So to say that a nearly 4 million share buyer won't have an effect on the share price is at best a very large assumption. IMO the only way that buyer doesn't really mean much for us is if they get to cover it into a massive collapse in share price. It's possible, but no way anyone can say that with certainly at this stage unless you know the future.

However, one can say with certainty that if we don't see a massive collapse in share price and instead the buyer does have to cover into strength instead of weakness, well then of course it will have an effect on the pps. Even during the heavier volume times, this stock still sees pretty light volume relative to that short position, and the higher this goes the more expensive it gets to cover.

It's impossible to know what the average short price is on the position, but they initiated over 5 million shares short back in Nov 09, covered a bit over a million of that position over the next year or two (at a profit for sure), but have been riding out the last 3.7 - 3.9 mil ever since. My guess is at this price range they are still very much in the green, but once it breaks .30+ then their position has to be getting closer and closer to being put in jeopardy. I think if these guys were really confident in the idea they would have shorted more during the pops over the past 5 years or so, but they've just let that open position ride. Since they are still in the green, they can afford to let it play out and they're likely hoping to cover into an utter collapse, but judging from how well it's based over that time, I'm doubtful they ever get that option but it's possible. I won't make any blanket statements and guaranty where they will cover because I don't know, just like Vera doesn't know that the short position won't have an effect on the pps. At these price or higher, of course nearly 4 million in buys will have an effect. No one knows for sure I do know that an open short position of this relative size has immense potential to add fuel to a fire.