Oh yeah, no question that there can be "phantom stock" - expecially in the Pinks and OTCBB. That's just an uncovered short. And your last point is true, too. But I disagree with the statement on the Pink Sheets website that MMs typically maintain an inventory of these little stocks. I've traded through a small market maker for many years, and he'd laugh hysterically at the notion that he maintains inventory of these thousands of little (often basically worthless) companies. As I said in the prior post, typically on the OTCBB and Pinks, if he's not reflecting an order from a real live buyer or seller, a MM will sell short first and cover second.
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