Learn to earn -Naked Shorts THE SQUEEZE 1.5 Billion Naked is real
Management has known about it and Nasdaq uplist or a super small dividend will flush em out..
Note the date and the source Read paragraph 2 -- read the whole thing
NEW YORK, Sept. 15 /PRNewswire-FirstCall/ -- SpongeTech(R) Delivery Systems, Inc. June 2008
Message from SpongeTech(R) CEO, Michael Metter:
Dear Shareholders:
1)As the Company continues to build off of a great 2008 year, we feel it is important to update our shareholders on events that are taking place within the Company and comment on the recent trading activity of our stock.
2)Management believes that our stock has been influenced by the illegal practice of "naked short selling". These people, or entities, are trying to undermine the shareholders' confidence in our Company, trying to induce you to sell your stock, and, in simple terms, hoping that if you do they will be able to buy back their short position sale at a significantly lower
price. They use detailed and complicated systems, and even sell from overseas through other exchanges, to sell nonexistent shares all day long trying to create a disparity between legitimate buy and sell orders.
3)These unscrupulous entities strategize to create stock price erosion in an effort to try to force us to continue to dilute the Company to raise funds. As you know, we have invested significant money into our Company and hold a large position in stock that is not registered and cannot be sold.
The float of the Company is significantly lower than the authorized and outstanding shares issued by the transfer agent. There are upwards of 300,000,000 shares that cannot, and will not, be sold into the market that could affect price dilution of our security.
We recently instituted a stock buyback program of over 25,000,000 shares, and we are evaluating the current market conditions surrounding our stock trading activity and expect to take action to rectify the situation.
The Company is in a very good cash position; our EBITDA is very strong and will continue to grow. Management is confident going forward and that the Company expects to see the same success across the children, medical, and household product lines that we have enjoyed, and continue to build, with both our automotive and our pet products. We will continue to expand all
our lines with our patented delivery technology, that coupled with an aggressive ad campaign will help us to reach our goal to be branded as the "America's Cleaning Company."
Following is a Corporate Update;
FINANCES
Un-audited revenue for the first quarter of 2009 ending August 31, 2008 were approximately $5,000,000, an increase of over $1,000,000 from the fourth quarter of our last fiscal year.
With our balance sheet and cash positions, we continue to greatly improve due to the increased sales of our products.
Best Regards,
Michael Metter, SpongeTech(R) CEO
repost from ibox
9. I am deeply skeptical when folks complain about colluding market makers and evil naked shorters. But in this instance there might indeed be a VERY large short position that does not show up on the official short interest stats. The story I have seen posted is that shorts sold a ton of shares back in 07 or early 08 and then approached management. They said they would go away if management sold them the covering shares at a low price. Management did not want to dilute the float in this way, so they told them to f*** off. This short position has grown over time – and now management is in a position to move decisively.
10. What is the evidence of a short position? Well, as of 4/16 we had just over 200mm tradable shares (722mm O/S – 480mm RM – 25mm officer shares on 08 10k = about 200mm). Doug Furth is reputed to own that many or more -- and he has filed a 13G for a fund he runs (41mm in the filing). There is a second 13G of 40mm (some members of that 13G have sold, but others have bought more. S Moskowitz (COO) is reputed to own a ton as well. He reputedly used BMAS -- a market maker that ALWAYS appears on the bid, never on the ask. (Note that management does NOT need to report these, because they file as a 1933 Act company -- their assets fall below the 1934 Act threshold.) Remember that SPNG was trading at $0.006 not all that long ago. At that price, an additional 100mm shares would have only cost SM $600k. Then there have been various investor polls that routinely come up with more ownership than the tradable. The DrStock post that is often bumped discusses a group holding 170mm shares among a relatively small group of investors. I personally know of over 20mm other shares by folks not in that group. And there were 7000 shareholders as of a month ago (probably more now). Try to fit all of that into 200mm tradable shares! And try to explain the volume, when so many of the shares are in strong hands! Really, I defy you to explain this to me without there being a short of AT LEAST 400mm.
11. Can the shorts cover? This is a very interesting question! I strongly suspect that tightly held large positions by insiders and Doug Furth and possibly some of our recent buyers HAVE **EACH** FRICKIN CORNERED THE SHORTS. That means that the shorts would have to buy all of the shares held by retail longs and they'd STILL BE SHORT until they knock on Doug Furth’s door and ask him what he wants them to pay. And even then they would STILL BE SHORT until they knock on Steven Moskowitz's door and find out what he is asking. Shades of VW and Porsche – except that Porsche had to back off once it became clear that the entire German financial system was at risk. SPNG could be a larger squeeze in percentage terms. And remember – the shorts tried to destroy SPNG over the past 18 months. This payback has been a long time coming, but what is they say about revenge being a meal best served cold?
12. So what will bring the shorts to the table? What will make them cover? Back when I posted an earlier version of this in December 08, I wrote that the most likely scenario would be "the company reverse merges into a shell company. Or perhaps a dividend or CUSIP change. Or, maybe they get taken private." Hmmmmm. Did anyone notice a PR just a while ago about applying to uplist to Nasdaq? A reverse merger into Nasdaq requires the controlling company to file an application for listing and the company must meet all requirements EXCEPT FOR PRICE... I have no idea what is going to happen, but I think one has to consider it a strong possibility that SPNG is going to do a reverse merger with a small Nasdaq company, which would force the shorts to cover.
This is all in my honest opinion. I could not presume to advise anyone what they should do! I have made a very major commitment of $$ to this stock - 4.75M shares at 2.4 cents average. I have not sold any shares yet. But you should do your own DD. Call up management if you are thinking of making a serious investment. Don't bother them with calls about 50K shares, but they will spend a lot of time with you regardless of the size of your position. Bill Young (IR) is a good place to start, but the real deal is Moskowitz. IF you have trouble getting through, then take that as a good thing. It may be that they are not talking because of the Nasdaq stuff. (FWIW, I have never spoken with Metter, and the emails I've received from him were rather offensive (mine to him might have been a tad over the line as well -- LOL).
In previous installments, I used to say that I would NOT buy SPNG based on the potential for a squeeze – but rather to focus on the fundamentals. Well, now we are at 16 cents, and while I see fair value being much higher, getting to fair value would *only* (LOL) be a double or quadruple from here. At the same time, I am becoming a stronger and stronger believer in the squeeze. So, now I rate this as a very strong buy based on the fundamentals -- and a table pounder based on the squeeze.
How rare is it that you have BOTH a fundamentals play and a squeeze play on the same stock?
Wadi Rum
Posted by: Webwyrm Date: Thursday, August 27, 2009 7:37:31 PM
In reply to: fastback who wrote msg# 176545 Post # of 176653 [Send a link via email]
I can answer part of that. If we merge.. it will force an accounting of the shares. At that time the Short squeeze will be triggered. So will us getting listed on the NASDAQ.
Over the months my feeling on the short squeeze has changed. At first i wasnt sure it existed, but then as i learned more.. i realized one defiantly exists. Then i didnt think it was as big as people were saying. I still am not sure its over 1 bill as people say.. but it is probable. But i will say this.. It trades like the float is high.. and the Reg Sho is the nail in the coffin. And we know with the AS being 900mil and the OS being much lower.. something is wrong in spongeville
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