skeen, you are smart to watch and wait. If a penny stock can prove itself, it can be worth an investment. However, finding a penny stock with results and value is extremely difficult.
With most penny stocks, I think the dilution in all its forms is a much bigger problem than the shorting. If there are shorts, I believe they are usually the result of the dilution.
Most of these penny stocks have no business being in business or being public. They are a drain on the free market system. Often the small companies that have a chance of success are kept private. The junk is dumped on the public suckers.
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