Discount (retail) brokers don't allow retail investors to short OTC stocks. Even if you could, brokers charge a per-share price, so you would lose money. It is pointless.
Brokers themselves can do it, but it is generally fruitless, since as you mentioned the risk is huge.
Great points Maryland and very refreshing to read. Reality is not to many OTC company's merge in as SEC Filing. This is essentially the cream of the crop as far as mergers. You would expect some sort of dilutive debt, but not here. Byoplanet is Solvent w millions in the bank. Of course they want the shares super cheap.
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