First of all Blackstar's proposed trading platform isn't able to prevent naked short selling. Aside from the fact that naked shorty selling is not legal and unlikely happening with these stinky pinks despite the constant crying about it on these boards. Short selling is considered naked when the entity shorting the stock doesn't bother to borrow the shares first, so locking shares away in some scheme makes no difference. This trading platform is intended to trade OTC stock and I for one have never bought into the narrative that short selling is what decimates tickers like this one unless it is coordinated by these toxic lenders and they sure as he77 won't lock their shares way.
The S-1 offering prospectus is the source for what the trading platform is and how it works. Below is one of the last SEC Q&A correspondence letters used to flesh out the S-1 offering prospectus. When I read over the explanation in the letter about how the trading platform would work I find myself asking why would I do this let alone pay a fee for the privilege. Why would a broker / dealer go to the trouble and expense and would a company really require anyone who purchases their stock to jump the hoops and expense? Is there really some problem with how shares are traded already that would motivate one to use their idea?
Please clarify whether the trading market operating on the platform is distinct and separate from the OTC market on which the common shares currently trade, and whether there could be discrepancies between the trading prices of common shares and electronic fungible shares, whether resulting from different liquidity in the markets or otherwise.
OTC markets currently trade book-entry electronic fungible common shares as well, however, the BDTPTM platform, with its ATS/broker-dealer host, is a distinct market from the OTC market. Because it is distinct from the OTC market on which the common shares currently trade, there is a possibility that the prices reflected for the common shares will differ across the trading markets. BDTPTM, for instance, only accepts free trading securities (of BlackStar common stock) or cash and prohibits shorting. As a result, there could be a difference in price from one market to the next due to different liquidity in the markets as there are arbitrage opportunities in both separate trading venues. A risk factor detailing the possibility of price discrepancies has been added on page 20.
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