Replies to post #355940 on NanoTech Entertainment Inc (NTEK)

[underdog150]

How could anyone who is long NTEK ignore the facts posted here about David Foley's Royal Capital Group? Instead, the most damming evidence NTEK is a scam is dismissed using the daily short interest as the never ending excuse that no one is selling, as it's all the shorts fault.
This ready made excuse for a falling stock price has cost investors millions over the years for anyone that believe it.

The FINRA daily short volume report

In February 2010, FINRA began publishing a daily report showing short volume in all issues traded that day. They did so under pressuExpect A Massive Short Squeezere from the SEC, who told them “transparency”—evidently even of the meaningless kind—was required. In November 2009, Jess Haberman, a FINRA official, expressed concerns about the soon-to-be published list, noting that:

...with respect to broker-dealer proprietary sales, especially when acting in the capacity of market makers and block positioners, such trade volume information may not always depict accurately the quantity of stock sold short. It may tend to over-count such volume, and therefore, if published, unnecessarily impact investor confidence in an unforeseen way.

Haberman was correct. The Get Shorty bunch jumped on it with glee, proclaiming that it “proved” naked shorting in every penny stock out there. Worse yet, they added up the numbers from day to day, which resulted in gigantic and ever-increasing short positions for just about every penny stock. Short numbers of any kind are never added up: they are a running balance. Each day, some shorts are covered; others are opened. It's like your checkbook.

Essentially, the short volume reports reflect MM activity. They report nearly all trades, and only the first leg of any trade is printed. As Haberman pointed out, the MM reporting a short sale may cover immediately, and end the session flat. Anyone who calls FINRA to ask about all this will be told to rely on the bi-monthly short interest report, also published by them.

In the three years since the daily short volume report first appeared, not a single short squeeze could have been predicted based on the information contained therein. Yet the NSS fanatics continue to beat the drum.

Nonetheless, websites like buyins.net, run by Tom Ronk, and otcshortreports.com, run by John Lux, claim to be able to call a squeeze based on the daily short volume numbers. So far, they haven't been successful in doing so, though many readers mistake strong rallies for squeezes. Buyins.net is a promotional site; companies pay Ronk to produce “squeeze trigger reports.”

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definition_short_squeeze

Short squeezes

Traders do short stocks, and market makers qualify for an exemption that allows them to short stocks naked in order to provide liquidity. The latter must always trade against market sentiment: if retail wants to buy, they must sell; if retail wants to sell, they must buy. If the MM miscalculates, and finds himself with a serious imbalance he can't cover going forward, he'll be in serious trouble. Traders too will have difficulty covering if the stock rises precipitously. Both will be susceptible to buy-in notices from their clearing firms, and could lose very significant amounts of money as the stock rockets higher and higher. That is a short squeeze, and for longs, a squeeze is a delightful experience.

Most short squeezes occur in exchange-listed issues. Though rare in penny stocks, they aren't unknown. Two years ago, Lithium Exploration Group (LEXG) enjoyed a spectacular run that left some small broker-dealers in ruins. More recently, Lot78 Inc (LOTE) experienced an even more impressive squeeze, which has been discussed at length in an article at this site. The fun and games with LOTE began nearly a month ago, and still aren't over.

A short squeeze will result if one or more MMs sell naked into buying pressure and become trapped. But these people are professionals, and can nearly always avoid that outcome. Contrary to what's said at countless penny stock conspiracy websites, they don't short willy-nilly, in an effort to “destroy” companies. They make their livelihood trading the stock of those companies. Why kill the golden goose?

Resist the siren song of those who'll tell you every poorly-performing penny stock is a tragic victim of NSS. It just isn't true.

[Zorax]

They're back to eating each other on the outerweb.

[Meow D itchy Kitty]

All that only works on Cats for so long. Meow got so sick of the 100+ lies made by NTEK over the years. And the fellow shareholders that lost their shirts believing in NTEK no matter how bad they failed and lied, yet still cheerlead and support them.

This Cat got out over a year ago and lost a lot of fur. If Meow had still held on, Meow would be looking like Mr. Bigglesworth by now. Some fur is better than no fur, but try telling that to a NTEK long. They act as if they hate fur(Money) entirely.