Replies to post #50139 on CarbonMeta Technologies Inc (COWI)

[swingingRichard]

I don't think you understand the metric you are touting.

#1 shorted stock on the OTC

[1manband]

#1 shorted stock on the OTC

That is not even close to being true. Current short interest in the stock is....100 shares. That is IT.

http://otce.finra.org/ESI

Short interest and short volume are not the same thing, and are really unrelated. Short interest is the number that counts - it is the actual number of shares borrowed and sold short. Short volume only denotes trades made by market makers when they do not have the stock long to sell. The vast majority of short volume shares are covered immediately (within seconds), since MM's don't want to be short even 1 share at the end of the day. Too much risk.

High short volume in penny stocks typically denotes 1 thing - dilution. COWI has a MASSIVE amount of toxic death spiral convertibles outstanding. At current prices, they are convertible into over 100 BILLION new common shares. There is no doubt those toxics are being converted and dumped. SEC regulations permit the shares to be sold not when they are issued by the Transfer Agent, but when the conversion notice is issued. So what happens is a toxic convertible holder has a friendly market maker they work with. The MM sells as much common shares as they can during the trading day. Since the MM doesn't have the stock in an account, every trade they make is marked "short" and adds up in the short volume column. Right before the end of the day, the MM tells the toxic death spiral holder how many shares they sold. The toxic holder then makes a conversion notification to the TA for that exact number of shares and tells the TA to deposit the converted shares with the MM. Voila! The MM immediately covers all the shares they sold that day and is flat. Lots of short volume, but ZERO short interest. And lots of new shares dumped into the market.

Anytime you see a penny stock with very high short volume, it is not in any way a good thing. It is instead a VERY BAD SIGN of massive dilution.