Replies to post #126975 on DD Support Board and Research Team

[Sleepy2016]

Silly is believing that shorts have anything to do with OTC stocks period. Toxic notes equal lower conversion prices because of gravity, not shorts.

[1manband]

silly me, thinking note holders who rule OTC would enlist the help of shorts so they can convert more shares at lower prices

That is silly. And not factual.

The opposite is true - the toxic death spiral holders don't need lower prices. Their constant conversions at a fraction of the market price and immediate dumping drives the stock price down all by itself. Instead, what they need is people to convince investors to ignore the facts and buy the stock they are dumping. They need to support the price, not undermine it.

They don't hire shorters at all. Instead, if they hire anyone, they hire PROMOTERS. They pay for the promotion campaigns to find buyers for the stock they are dumping.

These toxic holders make money regardless of price, since their death spiral notes convert at a fixed percentage. The only limiting factor to their profit if VOLUME. They need more volume to dump into.

So yes, your belief is not factual.

[janice shell]

silly me, thinking note holders who rule OTC would enlist the help of shorts so they can convert more shares at lower prices.

That is silly. Why would they want to convert at lower prices? They convert just before selling. They don't convert a specific number of shares, they convert a specific amount of their debt. Naturally you shouldn't forget to factor in their discount to market, which can be as big as 50%.

So no matter what the price, they'll get 50% more stock than the conversion rate specifies, because of the discount. If the stock price is higher, they won't get as much stock overall, but the stock price will be higher as they sell. And it's easier to sell a smaller number of shares at a higher price. Dumping hundreds of millions of shares in the low triple zips can be tough.

So what you say doesn't make any sense. Toxic funders have no interest in driving down stock price. Needless to say, that stock price will drop as they sell. So if they're converting in tranches, by the time they get to the second one, the price will be lower. And so on, until the stock bottoms out, and further sales become difficult.

That's when the company does a reverse split.