Replies to post #7012 on Michelex Corp (fka MLXO)

[Threeflight]

Very simply explained zagdad. If the market makers of the stock believe that MLXO will dilute the OS count to the full 1 billion shares, the mm's can keep shorting the stock at higher prices, knowing that with dilution comes more shares which equals a falling share price where they can just cover later.

If the market makers realize that the OS count is now greatly limited by a reduced authorized share count, they will know that dilution will not occur, hence they won't be so free to short shares knowing that supply is and will be limited.

I believe this shorting has been going on since spring, and with this pr, covering will commence!

[VST7]

Zagd, When short-sellers know that a company has a very large authorized number of shares but the outstanding total is way below that, many times when a small-cap company in situations like Michelex has been in, strapped for cash and robbing peter to pay paul, they know that these companies usually get Loans for convertible debentures and they know the stock is going to go down because of it, this isn't always the case, but many times it is and it is a shorters paradise. Tom G has learned a very expensive lesson here and is not going to make that mistake again. Reducing the Authorized number of shares lets the shorters know that the company is not going to be issuing hundreds of millions of shares thus diluting the crap out of the stock, so shorting it would be a waste of their time. I hope that helps.