Well, as spook pointed out - if restricted shares are sold onto the market they may not clear. I am not very educated on the subject and am unsure of the legitimacy to this argument.
To be honest, I don't think anyone here can really speak to this point with enough knowledge to be certain.
The Regulation SHO threshold was triggered by SPNG trading .5% of its outstanding shares as fail to delivers for 5 consecutive days. Traditionally, the reason for a fail is a naked short. The reason the threshold level persists is because of the continued failure to deliver.
This means there is an extreme shortage of legitimate shares. No matter how you slice it, this is the case and is why we are still on regsho.
Can these illegitimate shares be produced from another source - trade and fail? That I'm not sure. But I KNOW shorting can produce this effect, naked shorting is why there's a threshold, and its been over 50 days and counting...
News 
Market Data 
Discover 
AI
