Replies to post #571029 on NorthWest Biotherapeutics Inc (NWBO)

[exwannabe]

The issued shares are well documented.

Do you really think the brokers do not know they have purchased shares and they were not delivered?

[jon_k84]

There is a running theory that many (+1BN) of the NWBO shares being sold on the OTC market are spoofed/ghost shares that companies like Citadel are creating to artificially keep the price down. If the shares are counted due to a merger, the spoofed shares go away which create a supply and demand share issue, which would cause the price to go up.

That is the theory, at least.

Whether it's true or not is anyone's guess. The fact that NWBO has gone through the trouble of filing a lawsuit makes me think there's some truth to it, but either way, I would not invest one penny one way or the other based on this theory. I do not trust lawyers or Wall Street types further than I can throw a brick. My reason for investment is, and always has been, based on the excellent science that I've seen.

[Bright Boy]

PPS would move up if the seller of fake shares had to purchase to cover/deliver to those that bought the fake shares. Legitimate shares are those issued by the company and are recorded on the share register as outstanding.

Cheers,

BB

[Smitty5150]

during a merger, all shares would need to the accounted for, exposing the full naked short position. I am not a expert in this field, but know people who are. My expertise is biochemistry/bioengineering- Lab Supervision. I am sure some here would be better suited to answer your question.

[biosectinvestor]

No, the number shown is not a fictional number but the number issued on NWBO’s books and records. The notion of naked shorts is that there are more shares traded than are shown by those books and records. Some of that is endemic to the nature of trading fungible assets like securities. For instance, when a short actually does “borrow” shares to short, there is a buyer, who now owns shares, but there is a lender who nominally has a right to have shares replaced who thinks he has just “lent” them and owns them too.

However naked shorts do not even borrow the shares, they sell shares they do not own, supposedly. I think more likely and here and there you will hear one of the litigators mention it but you have legal activities like prime brokerage, and also you have the securities lending business and lastly you have treasury operations that receive collateral and they can while “holding” pledge collateral, rehypothecate those securities. In some markets the same collateral can be rehypothecated unlimited times, the same shares. Some of these practices are completely legal in foreign jurisdictions and those local regulators have strong opinions as to why it is so. Usually those securities are only treasuries and t-bills. Cash while fungible can’t be rehypothecated in the same way, as there is no distinction from one pile of cash in the same currency to another once in an account, so many collateral arrangements are for cash only these days.

I am not a proponent of the naked short notion but I do think the shorting of small cap stocks like this should be limited to hedging an actual portfolio of the stock only, and not for speculation.

One thing is clear also, the short interest should not be able to go above a certain nominal interest in a company’s number of shares as well. When shorts were shorting more shares than existed in GME, that seemed to me a kind of abuse of the market.

Now when I say I am not a proponent of the naked short idea, I still believe and said from the get go other market practices create an opportunity to game the system that disadvantages retail and those practices need to be regulated. When I first got her I believed that spoofing was likely a big issue, just because of reading many of the posts. But there are clearly aspects of the way the market works that prevent full transparency of who is shorting, how much and why. So those practices need to be not just addressed but new ways to regulate and to automate enforcement need to explored.