Replies to post #18203 on Universal Energy Corp (UVSE)

[mikeyk]

True, but eventually their will be enough smart investors that have read the 10Q and the fundamentals and have paid attention to the production and revenue growth and just won't sell knowing full well that there is a huge NSS out there. Once things are over and done with, if there is a larger NSS position than the O/S share ratio, how do you reconcile for it? Example...Say O/S just increases 32 million for the next 3 months each month, then the O/S will grow to around 370 million. What if the naked short position ends up being around 500 million shares due to expectations from the 10Q. How will they ever be able to cover the position if the shares don't and won't exist? If the SEC calls for them to cover, how would they do it? Interesting quagmire don't you think?

[EDDIEHAZEL]

I have some experience way back yonder watching s few stocks get pummelled from NSS only because of death spiral financing, which is generally convertable preferreds that can be converted based on a % of the stock price, without a hard floor, since the NSSer isnt really nakkie, since they can always cover. the cool part for the seller is that they are generally short at a much higher average than where they convert the preferreds, as long as they can convert the preferreds to common shares at 80% they are never at real risk, hence they can sell sell sell... In fact, our own mr Mulshine actually unwittingly approved sedona's death by allowing sedona to issue those death spiral convertable preferreds to be issued to sedona in the first place. They were one of the first to employ that horrendous financing technique.
Not saying that is the case, but when you have convertable preferreds with no hard floor, huge increase in A/S, and a pummelling of the stock, you gotta think NSS with all the resources to cover whenever they want with NO effect on the demand for the stock.